Dramatic increases in stated-income loans present mortgage lenders with increased challenges in managing loan risk. With investment firms increasingly rejecting loans due to income misrepresentation, establishing the soundness of borrower-stated income has become a crucial step in avoiding costly loan loss.
Recent findings conclude that a significant number of borrowers exaggerate their income—often by more than 50 percent—when applying for stated income loans. The introduction of this additional layer of risk makes FICO scoring alone insufficient to reasonably predict a borrower’s capacity to repay. Instant, objective borrower income validation—proven to stratify and predict loan performance—is now essential in today’s market.
IncomePro®, the industry’s first real-time, integrated income validation tool, provides lenders a fast, effective way to establish the soundness of a borrower’s stated income.
Until now, a lender’s only option for validating income without documentation was to access an HR system. Combining the power of three industry-leading salary databases, IncomePro provides a more predictive and objective reasonableness test than any solution available, allowing lenders to get straight to the truth in income.
Additionally, IncomePro analyzes the rational progression of a borrower’s salary, taking into consideration the pattern of employment and occupation—combined with neighborhood income averages—to determine predictable salary growth and establish the borrower’s repayment capacity.
IncomePro can be delivered through a secure Web-based interface, batch processing, or direct XML integration into an institution’s production system.
