Skip to main content

LenderLive’s GuardianDocs to Offer New Income Validation Solution

Oct 19, 2014

LenderLive Network Inc. has announced that its GuardianDocs unit has launched FACTCheck, a product designed to help lenders calculate and validate the income and assets used to determine and prove ability-to-repay (ATR) decisions. FACTCheck uses advanced analytics to review and compare income data residing in a variety of different documents, including IRS 4065 tax transcripts, tax returns, W-2s, 1099s, paystubs and bank statements.

Underwriters must manually review the documents supporting the borrower’s income and assets, and inconsistencies within and across the sources of documentation can often be missed. Depending on the seriousness of the miscalculation or error, loans could lose their qualified mortgage (QM) status and create life-of-loan liability for lenders and investors, experts say.

“The best way to calculate, and then validate income, is to compare all of the sources of this information to make sure that they are ‘telling the same story,’” said Jonathan Kunkle, president of GuardianDocs. “FACTCheck ‘interrogates’ the information presented in various documents, looking for discrepancies or variances that might result in over or under calculations of income. For example, does a borrower’s pay stub reflect the same income as the W-2, or are there garnishments that need to be considered? Or does a bank statement show monthly cash flows, either in or out, that warrant further investigation?”

FACTCheck’s combined income report adds to the cash flow analysis by further validating the income within and across the other source documents from the loan file, the company said. The FACTCheck rules engine systematically addresses all the common income discrepancies, ensuring the household’s gross monthly income is accurate and, because the means to which the income was calculated is captured and stored, is also defensible.

In addition to QM/ATR, other expected use cases include due diligence, loan sale and file reviews, pre- and post-close QC/QA, loss mitigation, and CFPB audit preparation.

About the author
Oct 19, 2014
CFPB Orders Freedom Mortgage To Pay $3.95M Over Housing Data Errors

CFPB proposed an order requiring Freedom Mortgage to pay a $3.95 million penalty

CFPB Proposes To Ban Medical Debt From Credit Reports

CFPB expects the rule would allow 22,000 additional mortgages to be approved every year.

Manufacturing Fair Lending

How data defines a modern theory of redlining

A Watershed Moment For Trigger Leads

Pending legislation collars controversial data sharing practice

CFPB Unveils Lender Naughty List For Repeat Offenders

CFPB calls out nonbanks that have broken consumer protection laws

Is It A Deal Or Chicanery?

Negotiating EPOs with lenders