According to an investment bank report in late 2017 the level of loan approvals containing misrepresentations or inaccuracies could leave lenders exposed to a housing downturn.

The first hearings of The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in 2018 examined evidence to determine if banks have done enough to verify the information on home loan applications.

Over-valuing income from real estate assets and overvaluing the security are two areas of misrepresentation, however data exists that can help lenders identify applications that may contain information that is not completely factual and accurate.

Challenges:

  1. Borrowers provide inaccurate or fraudulent information about income from rental properties on their loan applications
  2. The security value held on file is missing or inaccurate
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Solution:

  • A point in time estimate of Rental income to compare against what was declared
  • A point in time security valuation to fill gaps in data quality and or validate the amount was correct
  • Real time rental estimate for use to validate declared rental income

 

Click here to learn more about rental AVMs .