The underwriter likely takes a screenshot of the Secretary of State's website when doing a business search for a few key reasons:
Detailed Documentation
Screenshots serve as a detailed record of the information found during the business search. They provide a clear reference point for the business's name, status, and other key details. This documentation is crucial for compliance, auditing, and potential dispute resolution.
For example, imagine if a borrower later claims they never operated under the business name listed on their application. That screenshot of the state records could be the evidence needed to refute that claim and protect the lender.
Verifying Legitimacy
Underwriters use screenshots to verify the legitimacy of a business by cross-referencing the application details against the official state records. This helps catch any discrepancies or red flags, like a business that claims to have been operating for 5 years but was only incorporated 6 months ago according to the state website.
Transparency and Trust-Building
Providing borrowers with screenshots of the business search demonstrates the lender's thoroughness and transparency. It shows the due diligence conducted and can help build trust. While borrowers may not always review this documentation, it's important for maintaining positive relationships.
Regulatory Compliance
Depending on the lender and transaction, certain regulations like the Equal Credit Opportunity Act (ECOA) or Bank Secrecy Act (BSA) may require documentation of the underwriting process. Screenshots help satisfy these requirements by creating a clear record of the research performed.
Specific internal policies around screenshots can vary by lender. Some may have additional requirements around how these images are captured or stored. There are also tech solutions emerging to help automate and streamline screenshot capture during underwriting.
Those quick screenshots can save major headaches down the line.
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