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TH E M R EP O RT | 27 FEATURE Time + Money =Automated Verifications In a world where "time is money," and lenders have much to lose when income and asset verification go wrong, automated verifications are the only viable solution. By Brent Chandler I n a world where the adage "time is money" has become a law of nature, it's little wonder that most technological innovations are created for the sake of speed. Doing more in less time has certainly driven most industry innovation, and the results have been nothing short of revolutionary. Automated loan approvals, automated underwriting, and automated marketing tools—these are just several technological achievements that have sped up the business of selling loans that did not even exist a quarter-century ago. Thanks to the 2008 housing cri - sis, lenders have recently focused more heavily on applying automa- tion to the process of qualifying borrowers and verifying borrower information. This focus has led to new industry milestones, includ - ing automated identity checks and tax transcript requests, as well as automated asset checks—includ- ing FormFree's AccountChek™ service. These solutions have also been about speed. After all, faster borrower verifications mean faster loan approvals and ultimately faster closings. Yet automation is not only about speed. It's also about data— which, with the proper safeguards in place, make transactions safer and more transparent. When applied to the borrower verifica - tion process, automation can help lenders create competitive advan- tages, meet the rigors of tomor- row's compliance challenges, and prevent fraud more effectively. Plus, it removes a major source of frustration for borrowers. For these reasons, the adoption rate for automated verifications will soar over the next year—as well they should. In fact, lenders that do not streamline borrower approvals through technology may be lucky to make it past 2016 in one piece. If you've been hesitant to adopt these new tools, here are the three biggest reasons you should reconsider. 1. Prevention Against Borrower Fraud A s types of fraud go, mortgage borrower fraud is one of the most prevalent. According to recent statistics from Fannie Mae, 20 percent or more of mortgage fraud involves false data about a bor - rower's income and assets. Falsified bank statements remain one of the most popular tools for this type of fraud. By some estimates, there are $13 billion worth of fraudulent loans originated each year. If Fannie Mae's figures are accurate, lend - ers are losing $2.6 billion per year in assets and income fraud alone. Lenders that claim they've never seen falsified bank statements are most likely just not catching them. This problem is only going to get worse, especially as the purchase market improves. That's because so many lenders are still counting on paper bank statements to verify a borrower's assets and income. Such manual processes are extraordinarily wasteful, in terms of not only time but also re - sources. It can take days or weeks to collect and review a borrower's information and even longer if this information needs to be verified again before closing. But the real value in automating the verifica - tion process is that lenders can practically eliminate fraud, which costs them much, much more. Today's technology allows lenders to gather bank statement data securely, directly from as many different institutions as a borrower uses—and does so in minutes. Furthermore, because all the information is in digital format, it can be easily assembled into a comprehensive report that gives the lender a bird's-eye view of a borrower's finances and identifies the borrower's problem areas. Such tools also reveal each borrower's complete asset and income situation, which paves the way for a clearer mortgage decision-making process. And by eliminating all paper, automation removes a significant fraud loophole from the transaction. 2. Complying with Ability to Pay Rules S ome in our industry con- tinue to argue that borrower fraud is not a lender's fault—in such cases, lenders are merely victims. Try telling that to the Consumer Financial Protec - tion Bureau (CFPB)! Given the agency's recent history, it is very unlikely lenders will catch many breaks with the "not-my-fault" argument when everyone knows