Getting Back to Basics – Whose Responsibility is it to Verify a Homeowner’s Information?

We routinely blog on this topic because it is something that continually comes up. Reshaping thinking on this topic means that the industry stands to save billions in deals that perhaps should not have been funded – and brokers stand to save thousands in lost deals.

All real estate sales professionals, mortgage agents, mortgage brokers and real estate lawyers, should be asking for a client’s identification as a part of basic due diligence. But does this happen all the time? No. Separate from checking your client’s ID, a second measure that all of the above really should also be taking is to validate who is the legal owner of the home.

If you have one client with ID and more than one legal homeowner, that is a problem. If you have two clients, one with ID and the other without, and two homeowners on title, this is a problem. If you have a client who is not presenting photo identification, this is yet another problem.

Good identification means an original passport or driver’s license, coupled with a birth certificate for example. Verifying that the person presenting the identification is the only person on title means running a search to see what is on record with the land registry.

The responsibility question comes into play when we think about just how many real estate and financial professionals leave it to the real estate lawyer to check this information – which is far too late in the mortgage underwriting/funding process if you ask us.

By the time a deal makes its way to the real estate lawyer, typically speaking, the real estate sales professional, broker, appraiser, lender and all other parties involved have performed their services and now must wait for the deal to close to get paid. When a deal blows up on closing, getting paid doesn’t happen and considerable time and expense is wasted on all sides.

This does not even cover the issue that your client may have innocently not mentioned another person on title because it is a parent or grandparent and they simply forgot or did not think it important enough to mention.

Undisclosed people on title will always be discovered before closing because the real estate lawyer will validate this – but is this their responsibility and their responsibility alone? We think not.

Technology has provided us with so many tools and resources that a real estate sales professional and broker for that matter are both positioned to validate this information effortlessly.

There is really no reason to not check identification nor validate who is on title to a property. The extra due diligence goes a long way to not only saving you time and money but strengthening relationships with lenders and other partners as well as improving the level of service you offer your clients.

Purview For Mortgage Brokers has the tools to make due diligence, including validating homeowner identities, easy. Call us today at 1.855.787.8439.