It's not you, it's Fintract
September 18, 2024 | Posted by: Chad & Patty Southwell
We often hear from clients 'why do I have to provide so much documentation'? It is usually older clients who remember a day where checks and balances were not in play. It can feel invasive and personal when a lender requests details of account statements. Rest assured, everyone is subject to the same rules. It's not you, it's Fintract.
Starting in mid-October mortgage brokers will be responsible to maintain strict adherence to Fintract, a federal government anti-money laundering and anti-terrorist initiative. These rules always applied but lenders have become increasingly more diligent in the last 10 years and now they are in force across the board.
Understanding the expectations around income and downpayment verification will make the process less frustrating for the consumer and agent.
Here are two of the biggest areas where changes have been made to the process and what you can expect:
1. Know your customer.
Two pieces of up-to-date government issue photo identification is the minimum requirement along with an application and credit consent. All other documentation is cross referenced to authenticate the customer. This is the first step in stopping identify fraud. There are also several stop gaps along the way where identification is confirmed including the final stage with the lawyer.
2. Downpayment.
The funds used to purchase a home vary with each client. Some are saved, gifted, inherited, etc. 90 day unaltered bank statements must be provided with full identification of account ownership. Large deposits must be verified. Any deposits between accounts must show the 90 day history of supporting accounts. Each step in the process of liquidating an asset for the use of a downpayment must be transparent and documentation provided.
There are other areas of check and balances, such as income and employment confirmation, but these are the two biggest. To ensure a smooth process we will lay out exactly what your unique requirements will be to satisfy Fintract expectations. Although the process can feel invasive or tedious, the end result is your identification is protected.
