Kroll Factual Data, a provider of business information solutions to financial organizations, has announced the release of an Independent Verification Solution which helps lenders comply with the proposed FHA credit policy changes announced on Sept. 18, 2009. “It is vital for lenders to prepare for the new FHA requirements to avoid repurchase claims and sanctions,” said James Donnan, president of Kroll Factual Data. “For the highest level of safety and soundness, verifications should be performed by an expert third party that is financially independent from the transaction.”
Under the proposed guidelines, mortgage brokers will no longer receive independent FHA approval for origination eligibility, but will instead be required to originate through an FHA approved lender. Since FHA approved lenders will carry the liability for broker-originated loans, they need to bolster their verification process to support the additional volume that will come from the correspondent channel. Adding to this new strain on scarce underwriting and quality control resources is a new rule for FHA streamlined refinances which requires lender certification of the borrower’s capacity to pay at the time of application.
“This raises the bar at a time when FHA market share is soaring,” said Teresa Grove, senior vice president of marketing, Kroll Factual Data. “The Independent Verification Solution helps lenders keep up with demand for FHA loans by delivering timely, independent verifications so underwriters and quality control personnel can focus their efforts on making good loans instead of on gathering information.”
Kroll Factual Data’s economies of scale and proprietary processes allow them to deliver capacity-to-pay verifications at a lower overall cost than doing the verifications with in-house resources or by assembling a complex set of disparate verification products. Since the verifications are performed externally to the lender’s operation and billed according to actual use, lenders also ensure that expense stays in sync with volume fluctuations for higher profits and better capital efficiency. The detailed billing and reporting that is included with the service increases traceability and transparency for Real Estate Settlement Procedures Act (RESPA) compliance. To give lenders an extra measure of protection against the risk of errors, Kroll Factual Data’s verifications are backed by representations and warrantees of accuracy. Lenders can customize the solution to include additional types of verifications and risk assessment analytics as required for their specific risk management program.
For more information, visit KrollFactualData.com.