Source: Housing Wire —
The residential mortgage origination process is very complex and origination and underwriting mistakes can be very costly, so lenders need to make sure they’re mitigating every possible risk related to the borrower and property. That’s why due diligence is a critical element of every mortgage transaction. The purpose of due diligence is to protect lenders by reviewing and verifying all information provided by borrowers to eliminate fraud and other concerns.
The process includes several components and can require teams of people to conduct each. As a result, like other phases involved in servicing home loans, due diligence can be time-consuming and complex. It can also be costly to lenders who try and handle the task in-house.
