Fast income verification for pdfs: For mortgage brokers, AI is more than just a productivity tool

Mortgage brokers are a key intermediary in the mortgage market. By engaging with both borrowers and lenders, the broker helps simplify the process of securing a deal. While the broker isn’t the one offering the loan, they can sometimes help buyers access a wider range of loan options. Brokers have a network of many different lenders, and are familiar with the current market for loans; mortgage brokers leverage these resources to get borrowers a better rate or term.

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Brokers do the legwork for mortgage documentation

Mortgage brokers rely on financial documents provided by buyers. Unlike the loan officers at banks of credit unions, brokers aren’t tied to a specific financial institution. Using the buyer’s financial information and their knowledge of the market, brokers shop the deal around to potential backers. However, in order to do this, the broker needs access to the buyer’s income, credit score, and employment.

Since the mortgage broker is the one doing the legwork for the deal, they’re usually the one collecting documents from prospective buyers. These documents include proof of income, W-2 forms, credit history, employment verification (pay stubs, invoices), tax returns for past 2 years, asset verification (car deeds etc), and documentation for any outstanding debts.

Mortgage brokers earn their commission by crafting a great deal! Mortgage brokers are a good option for borrowers who are in a less common financial situation, such as veterans, FHA loans, or buyers who are self-employed or own a business. The broker does the work of collecting financial information up front, the broker submits the buyer’s financial documents directly to the lender, which saves both lenders and buyers time. However, this means that if a buyer provides falsified documents to the broker, it's the broker’s reputation on the line!

The case for fast income verification tools 

Mortgage brokers ask for financial documents from buyers, which can be a bottleneck in the deal process. Income verification is often done manually, as many brokers know! Manually pulling data from a pdf is a time consuming process. Even if the borrower has logged into their bank for you, or provided government/tax documents right from the source, entering this information into your system, the lender’s forms, or your own debt ratio calculations can all bring risk into the process: risk of errors, security risk, and the risk that comes from lost time. With stakes as high as a mortgage deal (especially one that could close in a matter of days), brokers must find an alternative to emailed documents or manual inputs.

In the past, these types of unstructured financial documents weren’t easily automated: the unstructured forms, paystubs, documents, letters, and liens that make up a financial history were difficult for earlier forms of automation to process, even with OCR tools.

Now, however, AI platforms are able to not only process this income information quickly and accurately, but also analyze it and understand where the documents won’t ring true. For example, a common strategy of tenant fraud is to provide old paystubs for an employer they no longer work for. The tenant will fabricate the paystub dates to show them as current, but a savvy broker might catch inconsistencies in payroll tax deductions that reveal this to be untrue – but would the same savvy broker catch the mistake on a time crunch, after looking at 50 pages of similar data?

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Brokers are on the frontlines for accurate mortgage documentation

Brokers have a vested interest in making sure that the documents they provide to lenders are accurate, authentic, and true. As brokers build long term relationships with many types of lenders, this network becomes their biggest asset over the course of their career. These lender relationships can be compromised by inaccurate or fraudulent data – and even in the mortgage space, this is something borrowers might do. Considering that 93.3% of landlords said they’d experienced fraud in the past year, including falsified pay stubs, employment information, or fake references, there’s no escaping the need for income verification and income verification tools.

Accurate data is necessary to remain competitive, reliable, and build trust – which is why there has never been a better time to try out income verification tools.