Equifax has announced a direct integration of its Undisclosed Debt Monitoring solution, now allowing Avista Solutions' customers access to the Loan Quality Initiative (LQI) solution for identifying undisclosed debts during the mortgage origination process—directly from their Avista Agile LOS. Undisclosed Debt Monitoring monitors and notifies lenders of new loan applicant activity initiated during the pre-funding period. By leveraging Undisclosed Debt Monitoring, financial institutions gain a competitive advantage that will protect them against losses—often stemming from mortgage repurchase demands and unsalable loans—while maximizing operational efficiency in the underwriting process.
As part of current investor and lending requirements such as Fannie Mae's LQI guidelines, mortgage lenders may be accountable for any new debts that a borrower has incurred prior to closing that may impact their ability to fulfill a mortgage payment obligation. Under these guidelines, a loan may be subject to repurchase if any debts or liabilities incurred during the underwriting period are not reflected on a credit report or disclosed in the final loan application. According to research of the top five lenders conducted by Equifax, each repurchase, on average, can costs lenders up to $70,000. According to Fannie Mae's National Underwriting Center, undisclosed liabilities in loan reviews continue to represent the leading type of significant borrower misrepresentation— comprising 44 percent of all 2011-2012 originations.
"The mortgage industry continues to embrace Undisclosed Debt Monitoring as the LQI solution that makes underwriting processes easier and more accessible, while improving the borrower's mortgage lending experience," said Steven Meirink, Equifax Mortgage Growth Initiatives Leader. "By integrating our Undisclosed Debt Monitoring solution with Avista Solutions' state-of-the-art loan origination system, more lending institutions will now have access to the needed data and analytics to make better underwriting decisions, improve efficiencies, and reduce repurchase exposure."
Avista Agile LOS is a fully-secure mortgage loan origination system (LOS) that fully supports retail, consumer, wholesale and correspondent mortgage lending. It is 100 percent Web-based and does not require downloads, allowing institutions to access the system anytime, anywhere.
"We understand the importance of providing our customers solutions that enable them to uncover undisclosed debt," said Avista Solutions COO and CFO Jerry White. "With Equifax, lending institutions will have access to an all-in-one loan origination system, fully equipped to identify potential borrower misrepresentation or undisclosed debt early in the loan origination process. "
To mitigate loan buy-back risk, the integration of Equifax Undisclosed Debt Monitoring into Avista Agile LOS enables financial institutions to:
►Quickly identify potential borrower misrepresentation or undisclosed debt early in the loan origination process to ensure the best customer experience possible.
►Build business rules that streamline the underwriting process, resulting in significant time and cost savings for the lender and fewer last-minute document requests for the borrower.
►Easily customize a compliance program to fit within existing production workflow and address specific credit policy and guideline procedures.
►Leverage a single, user-friendly report that includes Undisclosed Debt Monitoring analysis.