If is walks like a duck and talks like a duck, it may be a duck! Financing a mortgage has a lot to do with good underwriting and funding models – but also a lot to do with gut instinct! If you are underwriting an application and something seems fishy, the time to dig deeper is now as to save invaluable time and expense!
Clients and brokers alike err from time to time. Often this is unintentional and occurs because the individual made their best educated guess on a piece of information. Of course, sometimes there are also deliberate attempts to manipulate information to get a deal through.
Here are some key underwriting tips that you may or may not be deploying to mitigate risk when you underwrite a deal.
Compare – When asking for documentation from the broker or client, such as void cheques, paystubs, ID, etc., make sure to check your documents and compare them against the information both in the credit report and in the application. This can be one way to not only identify issues that could surface later on your deal but also to mitigate fraud. I know, I know – seems like common sense, but many underwriters process volume deals and scan paperwork, when taking an extra couple of minutes could make a major difference.
Verify – don’t just take what is said to you at face value. Check the facts on the application at the application stage. Tools are now available that will enable you to verify who is the legal homeowner is, as well as verify registered mortgages and liens.
Evaluate – investigate the value yourself. Do not just depend on the fact that CMHC may accept the value or that you are going to get an appraisal to move forward on stated value. This can impact your closure rates with your insurers, not to mention avoiding that the wasted time spent underwriting a deal only to find out later that the value wasn’t there.
So we have talked negatives. You thought something seemed fishy and thus investigated it – does it mean that you will always discover a bad fish? Absolutely not. You may discover a big, fat grilled salmon. Your client may owe far less than anticipated or may have a home worth far more money than the client or broker projected. What does this mean to you? Upsell, upsell, upsell. You may have more of a deal than you think you do!
If something seems off, don’t ignore your gut. Compare, verify, evaluate. If everything is good, that is great. However, if something isn’t lining up, save yourself the time and expense and fix the problem right away.
For more about the tools that make comparing, verifying and evaluating easy, call Purview For Lenders today at 1.855.787.8439.