How to stop spending money on bad data

The problem with income and employment data

Income and employment verifications (VOIE) are crucial for the loan process to go smoothly, but mortgage providers are reliant on a few data providers who have monopolized the data process. As a result, these handful of providers control the cost of verifications without needing to uphold a set of standards. This means that mortgage providers have to accept that verification reports are just sometimes… Incorrect.

And to solve for that, they build complex in-house verification waterfalls to look for the data again if it fails the first time, or hire people whose sole responsibilities entail correcting that data. Either way, mortgage companies pay twice or multiple times for what should be a one-time cost, decreasing their margins.

How has this become acceptable, and why do organizations still operate like this? It all boils down to the belief that hit rate or coverage rate is what matters. But they are inherently deceptive metrics to measure or track.

• Coverage rate is the percentage of potential loan recipients that a vendor has data on. Not accurate or recent data, just data. This means that a vendor can claim “high” coverage but there’s no guarantee that any of it is usable data.
• Hit rate is similar in that a “hit” can serve up a duplicate or partial record and still count as a hit. In this case, still not usable data.

What’s true for both of these? Neither guarantee you that the data is accurate; just that the data exists.

Hold your vendors accountable to accuracy

Rather than ask about hit rate or coverage rate, mortgage providers need to be asking their vendors: How accurate is the data? How accurate are the completed reports? A high accuracy rate is what ultimately lowers overall costs because it reduces the amount of extra work your organization needs to rerun processes or manually correct data. It shortens the time it takes to get a completed verification, which also saves on costs.

Speaking of which, accuracy goes hand-in-hand with completion rate. Completion rate is different from hit rate or coverage rate, because it measures the effectiveness of a vendor to generate complete and usable reports, and not just reports filled with any data that exists. A completed report means no additional work is required for your organization to run the verification.

Get 99.95% accuracy with Truework’s Report Quality Assurance

Truework delivers both a 75% completion rate and a 99.95% accuracy, the former achieved by our automatic orchestration of all major verification methods and the latter achieved by our focus on report quality assurance.

What is Truework’s Report QA? It is a proprietary internal system of automated workflows and rules applied to every report. The 30+ set of rules are applied at predetermined times throughout the verification process as checks and balances to ensure that no bad data is slipping through. Common issues that Report QA is checking for include:

• End date (if employment is marked as terminated)
• Total income is not negative
• Dates are sequential
• Pay stubs add up to the total gross income
• Income is within an expected range
• Hours do not add up to more than 7 days a week, 24 hours a day
• Data is recent according to verification requirements
• Salary is consistent across different sources and documents
• Personal info matches across different sources

How does it work? As we are leveraging our multiple verification methods to gather the data required for the report, we are continuously running our Report QA rules against the data found at each step. Every single report goes through this process. If the QA system identifies an edge case, it’s surfaced to our internal teams to resolve. Only once everything is fully resolved will we return the completed report to you.

Report QA is ultimately helping you remove duplicative efforts from the verification process and ensure that you’re only paying once for a verification. “Once” meaning: you get the report and that’s it. No need to run it through another step in the waterfall, whether that next step is another vendor or another person on your team. Think of it this way: If 15% of reports ultimately end up with some kind of issue, that’s 15% of additional effort and costs for your organization, which will add up, slowing down your ability to scale revenue and generate profit. With Truework, we take care of that for you, so you can hang onto that 15%.

So take a look at the accuracy rate you have today and ask yourself if it can be higher. If it can be higher, how much less money could you be spending?

What is Truework?

Truework is the only all-in-one, automated VOIE platform that fully replaces in-house waterfalls for mortgage providers by orchestrating all major verification methods with a single platform. With Truework’s industry-leading 75% completion rate, mortgage providers achieve up to 50% cost savings and up to 80% completions in 24 hours.

To combat bad data, our quality assurance technology provides 99.95% accuracy on our verification reports.

Learn more at truework.com