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How FormFree is Leading the Digital Age of Lending

Financial fraud is costing banks dearly. In 2013 alone, we saw over $20 billion in losses related to statement fraud according to CoreLogic’s 2013 fraud report. Fraud prevention starts with the data that borrowers provide to lenders.

If you can gather data directly from the source you can virtually eliminate fraud. The most reliable and trustworthy form of information is source data, and FormFree has introduced a way to collect direct source data in order to reduce fraud and loss.

We’ve been able to do this by digitizing an otherwise manual paper-based process for the validation and verification of loans. This manual process typically takes days, and sometimes weeks to complete.

AccountChek™ from FormFree enables its users the ability to order, analyze, and certify a borrower’s electronic bank statement data. It provides Lenders, Loan Officers and Borrowers with the market’s first fully automated, direct source Verification of Assets (VOA) report, enabling asset verification in minutes instead of days.

Each report uses a patented proprietary analytics engine to identify direct deposits, employer, and flag potential risk, making lending decisions easier and providing quality assurance and proof of ability-to-repay compliance for lenders.

From the beginning, we have focused on the mortgage industry; arguably the world’s most highly regulated. In the U.S., mortgages are governed by many different bodies that dictate what lenders must do to conform to lending practices that are suitable for consumers, and what rules they must adhere to in order to sell loans.

There are many data points banks must verify in order to comply with the regulations. For example, banks need to understand who the borrower is by verifying their identity with the social security administration along with income, credit history and employment with their respective agencies. In addition to these verifications, banks are now required to prove borrowers can afford their loan by establishing their ability to repay.

This can be done by analyzing a borrower’s assets and determining residual income and understanding cash flow. After all this data is pulled together, the lender can understand a borrower’s viability to pay back a loan. We help lenders comply with these rules by going directly to the source and pulling data from the financial institutions using our partnership with Yodlee® Interactive, thus preventing the possibility of potential fraud.

We are also able to cut out multiple steps throughout the lifecycle of the loan. For example, re-verification is often a tedious and costly process. The need to re-pull information right before a loan closes or when it’s being sold into the secondary market is time consuming and presents a burden to the borrower.

By automating this step, we’ve taken an otherwise frustrating process and made it simple. With the push of a button you can now re-verify a borrowers assets instantly, saving everyone in the process time and money….best of all, borrowers don’t have to do anything!

All in all, our solution has won several awards for our innovations in the mortgage industry, and most recently we were included in the Top 10 Tech Companies to Watch in 2015 by American Banker. All of this is possible because we were able to automate a paper-heavy manual process that was ripe for fraud and loss.

What is your experience with lenders? To learn how we automate the financial verification process for loans, check out this Yodlee Interactive case study.

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