Rapid Reporting Verification Co. and Magellan Lender Services LLC will partner to provide lenders with a one-stop identity and collateral verification service to combat mortgage fraud.

Under an agreement announced Monday, Magellan will verify collateral information submitted on loan applications, and Rapid Reporting will provide borrower-related verifications using IncomeChek, the company’s income verification tool, and DirectChek, Rapid Reporting’s identity verification application.

According to an industry database, there was a 30 percent increase in loans involving suspected mortgage fraud in 2006. The most common type of fraud involved falsified employment histories and exaggerated income, the Mortgage Asset Research Institute reported.

Magellan’s cascading automated valuation model enables users to get maximum hit rates and valuation accuracy needed to effectively detect fraud, the company said in a press release.

Rapid Reporting’s IncomeChek confirms and verifies borrower income against tax return, W-2 and 1099 data acquired directly from the IRS, and DirectChek authenticates Social Security numbers by searching the Social Security Administration’s database and 15 billion records in public and private databases, the company said.

In a separate announcement Monday, Rapid Reporting said its Stated Doc Report will now provide IRS-verified data indicating whether borrowers have filed a tax return for each of the past two years; confirm Schedule C and Schedule E filings; verify the Social Security number of the self-employed individual listed on the tax return; and provide the North American Industry Classification System (NAICS) code of the self-employed individual’s business and a description of the NAICS code category.

Stated-income and subprime underwriting guidelines often require a letter from a CPA to establish that a business has existed for the past two years. Rapid Reporting said obtaining the same information, with more details, straight from the IRS, is a safeguard against fraud. As a third-party source of information, Rapid Reporting has “no stake in whether the information aligns with the information stated on a loan application or not,” the company said.

No actual numerical data is released in Rapid Reporting’s Stated Doc Report, “so the integrity of stated-income loans can be maintained.”

Originators must require execution of IRS form 4506T, the “Request for Copy or Transcript of Tax Form” that enables a third party to receive copies of tax returns directly from the IRS for as far back as four years. Rapid Reporting obtains the tax transcripts from the IRS and completes the Stated Doc Report certifying the content is from IRS data.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription