Equifax believes that automated income verification can help improve the time required for mortgage applications, to help offset the impact of tougher affordability criteria.
The firm believes that while the new lending rules may rein in market growth, more accurate affordability assessments should ultimately result in fewer defaults – the new rules were designed to assure that consumers only borrow an amount that they can afford to repay. Equifax trusts that the rules will result in market stability.
Martin Hagerty, head of Equifax Banking & Financial Institutions services, said: “We believe automating income verification could help to significantly reduce the slowdown that may arise from new affordability checks. However, for income verification automation to be widely adopted, we know the industry must have confidence in its accuracy.
“We believe true verification comes from having data directly relevant to the consumer reviewed over a longer time period than the traditional one to three month view used in manual verification. This is likely to provide lenders with a more accurate view of income and may also help improve the customer journey.
“Automating the verification process can ultimately improve the speed and efficiency of the mortgage application process. Whilst there will still be a need to check paper-based documents as evidence to meet regulation, automating income verification will produce a more streamlined application process and perhaps help offset the increased processing time resulting from the new affordability rules.”
