Banks defend mortgage verifications

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The big banks are going on the defensive, reiterating confidence in their systems to vet mortgage applications presented brokers.

“In our underwriting standards, verification of income and the down payment is very important and central to the process,'' Mark Chauvin , chief risk officer for TD said during its quarterly shareholder conference call, according to the Canadian Press. “We will do that through several means and we'll do it until we're satisfied that we have it right.''

A number of the big banks have been questioned about their respective mortgage verification processes after Home Trust, a leading channel lender, announced 45 of its broker partners had been suspended for falsifying documents.

For its part, BMO is also standing by its processes.

“We are quite comfortable with the suppliers of third-party mortgages to us, and the processes that we have in place,'' Surjit Rajpal, chief risk office for BMO, said during BMO’s conference call earlier this week. Rajpal also noted it had taken a closer look at its own applications in the wake of the Home Trust news and hadn’t noticed any issues.

RBC, meanwhile, pointed to the fact that it doesn’t deal with brokers in defending its own verification process.

“Our applications are only taken by branch lenders and our proprietary mortgage sales force,'' Jennifer Tory, head of personal and commercial banking said during RBC’s conference call earlier this week, according to CP. “And for each application we verify income. We have various ways of doing that. And our policies require documents to be retained.''
  • anonymous on 2015-08-28 1:17:48 PM

    All the Big 5 cheat on income verification . As a broker I have seen them all do deals we could not get done as brokers due to income short falls. Complain to an insurer and they literally do nothing except to say if the mortgage defaults they will not honor the insurance. Compare that to a brokerage, we would get red Xed for sure and likely cut off !

  • Bert Czombos on 2015-08-28 1:22:31 PM

    OK - here's a question. For the "verbal" income verification calls that we now see taking place (in addition to written income confirmation) - what's the plan for client's who are employed somewhere that doesn't confirm income or employment details over the phone ? AND... Its especially interesting that the very lenders that are adding the verbal confirmation to underwriting (which can add days to the process) - they themselves wouldn't confirm their own employees income / employment details if another institution called them !!!!

  • Sam Baidya on 2015-08-28 1:36:07 PM

    Mortgage Verification:
    1) Must Submit 3 years Tax Assessment(Not T4 and Employer's Letter-both can be falsified.)

    2) Qualify 3% above the current rate up to 8% to(although actual payment will be at the current rate)-This way future increase will be safe and portfolio will be protected.
    3) Down payment should be increased to 25%(Conventional)& 15%(Insured)

  • donna on 2015-08-28 1:45:00 PM

    Where the insurers are seeing the biggest losses and what those losses are due to , will show where the processes are broken. Mortgage Specialists for major Banks usually do not have there offices in a branch. They also look to build relationships with Realtors, Financial Planners and so on to build business. They are no different then Mortgage Brokers or Agents in this regards.Mortgage Brokers and Agents work with all lenders except for Royal Bank, Cibc and BoM. Someone should check the book of business that Royal Bank sends direct to Hometrust.

  • Terri in BC on 2015-08-28 2:03:45 PM

    As a mortgage broker, and a former mortgage underwriter, I fully expect my documents to be vetted and verified by the lender. An ethical broker has nothing to fear by any processes done by the lender, as they should be confident that the documents they have obtained can be independently verified.

  • Marvin Thiessen on 2015-08-28 2:51:25 PM

    The vast majority of mortgage brokers and associates, do a better job of information gathering and verification than the banks do themselves. Often I have lost deals because a bank employee didn't verify information that changes the deal. Such as is this property principal res or rental?

  • vanislbroker on 2015-08-28 4:01:03 PM

    so many times I hear from clients and other that banks only ask for 2 or 3 pay stubs....rarely a job letter to verify employment. Brokers seem to have to submit more income supporting docs than road reps or in-branch loans officers requires.

  • Xyz on 2015-08-29 6:08:32 PM

    How convenient. Brokers are talking about it.

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