LenderLive's GuardianDocs to Offer Income Validation Across All Major Document Sources: Tax Returns, Transcripts, W-2s, Pay Stubs and Bank Statements
DENVER, Oct. 16, 2014 /PRNewswire/ -- LenderLive Network Inc., a domestic-based, end-to-end mortgage services provider, announced today that its GuardianDocs™ unit has launched a new solution known as FACTCheck™, 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.
Today, 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?"
Kunkle continued: "We have developed FACTCheck to systematically compare the historical data from the tax transcript with information indicative of more recent income, such as pay stubs and bank statements. ATR requires a lender to validate the likelihood of income sources to continue, which is impossible to do by simply looking at past history.
"Lenders are relegated to using spreadsheets to evaluate every income scenario, but, for example, the rules for evaluating year-to-year, month-to-month, or even continuation variances are still subjective to the underwriter. FACTCheck resolves this by applying the same rules to each and every loan and each and every income or asset document, a critical component of each lender's defense against future liability. Correctly calculating a borrower's income and properly documenting how that figure was calculated are paramount to future defense against ATR claims; and since income is the denominator in the debt-to-income ratio that establishes a Qualified Mortgage under the Consumer Financial Protection Bureau's (CFPB) rules, it becomes the foundation to the lender's safe harbor.
"Without any effort, FACTCheck can parse and analyze tax transcripts using IRS data," Kunkle added. "At a minimum, FACTCheck can highlight each line on Fannie Mae's 1084 cash flow analysis that requires additional validation, including income sources found on loans with self-employed borrowers or business owners. And because FACTCheck prepopulates the cash flow form, mistakes can be eliminated and time saved."
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 GuardianDocs™
GuardianDocs, a division of LenderLive Network™, is a domestic-based, comprehensive document services provider. GuardianDocs provides a best-in-class, hosted document management solution for document intake, imaging and recognition, and paperless workflow for financial institutions of all sizes nationwide. These services coupled with GuardianDocs document preparation and paper and electronic delivery solutions provide a complete inbound/outbound mortgage document service for any financial lending origination or servicing-related activity. GuardianDocs masters document content and compliance, transforming how data and information are managed. For more information about the company and its services, contact Jonathan Kunkle at 303.226.8104 or visit www.gts.com.
About LenderLive
LenderLive is a domestic-based mortgage services provider. Through its five service offerings – outsource services, correspondent lending, document services, settlement services and loan servicing – LenderLive offers the scale, experience and security to support its clients' origination, servicing and loan purchase operations. From large-scale, centralized operations centers, the company provides services to financial institutions of all sizes on a national basis. With tens of millions of transactions processed through its expansive service offering, LenderLive offers the vision, expertise and innovation on which financial institutions can rely. For more information about the company and its services, contact Rick Seehausen at 303.226.8001 or visit www.lenderlive.com.
SOURCE LenderLive Network Inc.
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