As part of the SharperLending compliance product suite, Equifax’s undisclosed debt monitoring tool will now be available to lenders to help them facilitate compliance with the GSE Loan Quality Initiative guidelines that were implemented in 2010.
Undisclosed debt monitoring provides lenders with continuous monitoring and daily reporting information regarding a borrower’s credit activity from the time the first credit report is pulled at origination all the way through the time when the loan closes.
According to the Spokane, Wash.-based risk mitigation technology firm, this daily reporting of activity greatly increases the potential to identify and prevent instances of mortgage fraud. The company said it also helps protect lenders by notifying them about any changes to the borrower’s ability to repay the loan, which ensures that lenders only close loans when the mortgagee adheres to the loan program underwriting requirements.
“The daily monitoring of changes to a borrower’s credit report provides lenders with the information they need when a borrower takes out new lines of credit once they have been approved for a loan,” said Dave Black, president and CEO of SharperLending LLC. “It also complements lenders’ workflow by enabling them to take appropriate action well before closing—to modify the approved loan package or, if the activity is suggestive of fraud, to stop the loan from closing altogether.”
Other tools SharperLending offers lenders include a soft-inquiry credit report pull right before closing and an automatic comparison between the report pulled at origination and the report pulled just before closing. By providing all undisclosed debt liability activity alongside the existing credit report, all relevant files are kept together in a secure, easy-to-locate virtual credit folder.
Craig Crabtree, senior vice president of mortgage services at Equifax, said this partnership with SharperLending provides their clients with an “always on” technological solution needed to enhance risk mitigation during the “quiet period” between the time of the original credit file pull and the closing of the loan.