5 Benefits of a Pre-Funding Audit Program
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The average mortgage amount is over $411,000. Before your lending institution approves the loan, you have to verify that the information on the mortgage application is accurate.
You already have some verification workflows in place, but adding a pre-funding audit program adds another layer of security.
There are several other benefits of a quality control program. Keep reading to discover what they are.
1. Reduce Fraud
In today’s competitive real estate market, buyers are desperate to get preapproved for a loan. That helps them compete with cash buyers.
They’re more willing to exaggerate information on their loan application to get approved for a loan. People will deliberately lie to get approved.
That’s fraud, plain and simple.
You have to be able to reduce fraud because it puts your mortgage company at risk, especially if you approve a loan and don’t do your due diligence.
A pre-funding audit ensures that all of your loans go through a rigorous process to reduce fraud and catch issues before it’s too late.
2. Comply With Freddie Mac and FHA
Do you work with federally backed loans like Freddie Mac, VA, and FHA loans? You’re well aware that these programs have pre-funding requirements that you have to comply with.
The quality control audit ensures that you comply with these regulations. If you don’t comply, your lending institution faces fines or penalties.
3. Reduce Risk
The bank takes on a substantial amount of risk with each and every home loan. The level of risk increases as home values soar and applicants need more money to purchase a home.
A QC audit verifies that the applicant has the funds to repay the loan.
4. Easily Outsourced
Your mortgage loan company might not have the bandwidth to handle audits. It takes time and expertise to do. You’d have to hire more employees.
It would also fall on your shoulders to provide regular training because the regulatory environment changes.
Fortunately, you can outsource Pre-funding Quality Control services. These are auditing companies that work with lenders to ensure applications are accurate.
5. Close Loans Faster
Can an audit help you close home loans faster? Absolutely.
The lender discovers issues with the loan application late in the process, which causes a real estate deal to fall about.
With a quality control audit workflow in place, the application gets verified quickly. The loan gets funded faster and the real estate transaction closes with few issues.
Realize the Potential of a Pre-Funding Audit Program
A pre-funding audit program is a way to introduce quality control measures before you approve a home loan. With the high cost of home loans only increasing, this is more important than ever.
You reduce the risk of lending, reduce fraud, and close loans faster. The best part is that you can easily outsource to quality control services. That takes the pressure off of your employees and reduces your overall costs.
Do you want more financial advice? Head over to the Finance section of this site for more helpful tips.