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The jury’s still out on whether bank account data is a viable alternative to the tedious process of contacting employers to verify a mortgage applicant’s job status. But there’s already hope that the same data could replace the even more nettlesome task of Internal Revenue Service income verifications.
“This is an alternative that can be used where borrowers will fit into the appropriate criteria based on their net income and their cash-flow streams,” said Brent Chandler, founder and CEO of FormFree Holdings, which works with Envestnet-Yodlee to provide automated verification of a borrower’s income and assets using data from banks and other sources.
The new method of using bank account data instead of tax transcripts may prove particularly useful if non-salaried employee income, which relies more heavily on tax transcript verification, becomes more prevalent among mortgage borrowers.