Demand for a service used to verify borrowers’ income on real estate loan applications has climbed more than 300 percent over the past four months, according to AppIntelligence, a provider of data integrity, fraud prevention, risk assessment and compliance tools for the residential lending industry.

Used to verify income for an individual, the 4506-T is a form sent to the IRS to request a transcript of a tax return. In response to the growing need for loan fraud detection tools, AppIntelligence in July developed and implemented an electronic service for processing the forms.

Mortgage professionals submit their request to AppIntelligence, and the company processes the request and performs a qualify assurance check before electronically submitting it to the IRS. The transcript is obtained within days, versus the six to 10 weeks it takes to obtain a copy of a complete tax return, according to the company.

When the service initially launched in July 2004, AppIntelligence said it received between 30-40 requests per day. Now the company receives more than 100 requests per day.

“Traditional methods were somewhat faster, but were rife with fraud,” VP of Operations Don Effertz said. “Today, verification of employment letters, check stubs, W2s and even tax returns can easily be falsified. An actual copy of an individual’s tax return can be obtained from the IRS, however each request costs $39 and takes about six weeks to process. The transcript contains all the necessary information for income verification, and is delivered in approximately 72 hours.”

Individual requests made through the AppIntelligence Web site cost $9.95, or $4.95 for subscribers.

AppIntelligence CEO Stephen Gott said the company is developing a scoring system to apply to the transcripts, removing more time from the process and giving lenders a quantitative tool for fraud detection.


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