A recent article by CNN Money notes that lenders are “lamenting the loss of thin, sleek, mortgage application files.” In their stead are 500 page behemoths, chock-full of income and asset records, employment verifications, tax returns, clarifications, and myriad other financial documents required after the bubble burst in 2008.
“Since the housing bubble burst, file size has grown steadily and dramatically,” said Peter Grabel, a loan officer for Luxury Mortgage in Stamford, Conn. “We now need two years tax returns, two months’ bank statements, sourcing of every deposit… on every file.”
Applicants Shoulder Burdens As Industry Slows
These unwieldy demands for paperwork slow down lending at the worst possible time, and put all manner of new burdens and frustrations on applicants struggling to get approved.
Author Les Christie notes, “All this amassing and analyzing of documents costs both time and money. And new mortgage lending rules that are going into effect in January will make it even more complicated.”
New Rules, New Hoops, More Paperwork
And it’s only getting worse. “New rules require you to triple-check everything,” said Jeff Taylor of Digital Risk, a mortgage processing company. Why?
Fannie Mae and Freddie Mac require that every deposit be accounted for and scrutinized to root out borrowers relying on friends and family for a downpayment loan. As a result, Christie notes, “An applicant may have $1 million in the bank, for example, but if there has been a recent deposit of, say $5,000, he is required to show where that sum came from.”
This is music to our ears over at FormFree HQ. It’s not often a major news publication validates your flagship product that solves the problem for lenders and borrowers alike. Our award-winning AccountChek instant asset verification solution is the cornerstone of a new type of loan application, a form-free one.
Goodbye 500 Page Application, Hello Instant Verification
What if we could say goodbye to the 500 page mortgage application forever while also reducing fraud, saving time, and meeting Dodd-Frank compliance obligations? What could such a liberation do for the mortgage industry? For the entire economy?
Consider that most data is now created, transmitted, and stored digitally by sundry financial, governmental, and private entities. That reality makes it possible to replace the 500-page mortgage application with our Financial Passport, which helps eliminate needless document collection and verification. Why separately collect or print out every piece of information when it’s all already accessible, verifiable, and straight from the source?
It’s About Time
With FormFree’s growing industry-leading suite of verification services — including the award-winning AccountChek — a new paperless, instant, and secure normal has arrived. And in this case, normal is looking pretty exciting.
Isn’t it about time the mortgage industry leverages technology that makes life easier and more productive for everyone?