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Most would-be homebuyers who have granted their mortgage lenders permission to verify their income and employment won’t have to confirm the request a second time with their employer’s payroll provider, thanks to a new automated verification tool from Truework that’s designed to root out fraudulent requests.
The latest incremental improvement in the mortgage application process, Truework Guardian, employs a proprietary risk-scoring system that allows payroll providers to set thresholds for automatic approvals of income and employment verification requests. Only if a request is deemed suspicious does Guardian notify employees and require additional authorization.
“Requiring additional employee authorization on a high-touch transaction like applying for a mortgage adds unnecessary friction because the employee has already provided consent,” Truework CEO Ryan Sandler said in a statement. “With Guardian, we analyze unique risk insights based on the reputation of the verifier, the classification of the verifying institution, as well as IP address and other data points to only require additional authorization when the risk of fraud is elevated.”
The new Guardian tool is available for over 48 million employees served by payroll providers participating in Truework’s instant data network. That network had grown by more than 8 million employees this year with the addition of three new payroll partners.
Streamlining mortgage underwriting could help more homebuyers take advantage of technology that can automate property valuations, allowing lenders to approve more loans without appraisals — a development that has some lenders offering same-day mortgages.
But when verification providers automatically approve verification requests without a full assessment of risk, it can significantly increase the chance of fraud or identity theft, Truework says.
Truework and payroll providers Rippling and Gusto launched a Payroll Network in 2021 that notifies employees when third parties ask to see their employment and income information and allows them to restrict data to specific parties or turn access off altogether.
Truework calls Guardian “the next evolution” of the Payroll Network, allowing payroll providers and Human Capital Management systems (HCMs) to standardize verification automation for every employer using their platform.
San Francisco-based Truework, which last summer raised $50 million in a Series C funding round led by G Squared, is an authorized provider of income and employment verification reports for Fannie Mae’s Desktop Underwriter validation service and also offers integration with ICE Mortgage Technology’s Encompass loan origination platform.
Last month TransUnion revealed that it had taken a $24 million minority interest in Truework, setting the stage for TransUnion to go head-to-head with Equifax’s verification service, The Work Number.
Truework claims to provide coverage for 90 percent of U.S. employees, with 20 of the nation’s 25 biggest mortgage lenders relying on its income and employment verification services, including Fairway Independent Mortgage, Caliber, Guaranteed Rate, Citizens Bank and LoanDepot.
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Email Matt Carter