top of page

8+ Verification Cascades Were Introduced in 2024. What Makes a Good One?

Writer's picture: Ruth Lee, CMBRuth Lee, CMB

Updated: Jan 16

Smarter workflows, seamless integrations, and better borrower experiences—here’s how verification cascades are changing the game.


Why Verification Cascades Matter

Mortgage lending involves countless moving parts. From verifying a borrower's income to confirming employment details, every step has to be fast, accurate, and compliant—but too often, it's a slog. Introducing verification cascades, also called waterfalls: the automated processes transforming how lenders conduct these essential verifications.


Introducing verification cascades, also called waterfalls
Introducing verification cascades, also called waterfalls.

Think of a verification cascade as your most efficient assistant. It starts with the most reliable or cost-effective data source—like payroll data—and only moves to backups or manual reviews, if necessary. This approach ensures that every decision is made quickly, without wasted time or resources.

Multiple data partners, LOS integrations and custom decision criteria make huge usability and cost impacts.

As greater options emerge to validate a consumer’s SSN, banking data, usable income and employment history, cascades are a natural choice to kick off autonomous verifications authorized by the consumer.  They’ve become the secret weapon for lenders—streamlining complex processes, keeping pace with shifting compliance requirements, and delivering the seamless experiences borrowers expect. But what takes a cascade from simply functional to truly transformative?


What Makes a Great Verification Cascade

The best verification cascades don't just automate—they adapt. They are architected to evaluate the best data source for each situation dynamically in real time. Integration is also key. Whether you use Ellie Mae's Encompass, LendingPad, or a proprietary LOS, a great cascade fits effortlessly into your workflow. It should enhance your processes, not disrupt them.


Scalability rounds out the picture. Whether you’re managing dozens or thousands of loans, a great cascade scales effortlessly, adapting to your growth while ensuring compliance every step of the way. Dynamic decision-making, seamless integration, scalability, and built-in compliance—these aren’t just features; they’re what set the best cascades apart.


As lenders prepare for a 2025 market -- that’s expected to be a lot like 2024, how value rich is your cascade partner?  How much processing data does your vendor collect, such as rejects for 8821 or fall out for credit applications – meaning, how are they partnering with you rather than solely selling a widget?  Are they helping you create a better process?  If it’s not measurable, it’s hard to baseline.  Therefore, it’s critical that your cascade vendor(s) measure and provide you success and failure metrics for your cascade orders.


Robust & scalable partners

There are now many options for bank statement data, IRS transcript data, employment data, credit reporting, credit scoring, and more. In addition, these data partners may have unique data delivery formats that you’ll want your cascade provider to normalize.


Scalability rounds out the picture. Whether you’re managing dozens or thousands of loans, a great cascade scales effortlessly, adapting to your growth while ensuring compliance every step of the way. Dynamic decision-making, seamless integration, scalability, and built-in compliance—these aren’t just features; they’re what set the best cascades apart.


Integrations

Is your cascade provider integrated into your LOS of choice, or can they be integrated into your proprietary system of record with moderate lift? Intuitive .json file formats, RESTful APIs, and solid documentation are good foundations of an integration platform.

For lenders using Encompass, specifically tools such as EPC and ASO, cascade partnerships deliver best-in-class automation and efficiency:


  • Streamlined Admin Support: Our professional services team ensures that your admin workflows are fully optimized, getting you up and running quickly.

  • Automated Service Triggers: Verification requests are initiated automatically based on loan conditions, eliminating manual steps.

  • Real-Time Feedback: EPC provides updates directly in your LOS, keeping your team informed at every step.


NCS builds proprietary technology, including cascades and our integrations into LOS, POS and data partners.  This strategy equates to flexibility for customer operations.  It’s not solely automation NCS is after – it’s reimaging how this technology gets your work done.  Think faster closings, leaner operations, and happier borrowers as just the starting line. The real impact? Transforming your workflows into a competitive advantage.  Our CEO, Curtis Knuth states it this way, “Waterfalls, cascades, whatever you call it – it’s automation that’s intended to keep the ‘Open’ sign lighted in your window longer.  They operate 24/7.  They’re a highly repeatable resource with a light lift to implement -- giving the customer opportunity to implement verifications previously out of reach and increasing loans processed per month.”


If your organization is looking to implement verifications or just review the marketplace, visit NCS or call (800) 582-7066.

 

About NCS

National Credit-reporting System, Inc. (NCS) is a trusted leader in information services, specializing in comprehensive income verification and employment data solutions. Serving benefit providers across multiple industries, we are dedicated to delivering unparalleled accuracy and reliability.


As the market leader in our niche, NCS stands apart by offering the most comprehensive suite of reports, performance analytics, and SLA-backed services. Our expertise enables clients to navigate complex IRS processes, including 8821 and 4506-C, with ease and precision.


With over four decades of experience, NCS continues to redefine industry standards, delivering innovative solutions that empower our clients to make informed decisions efficiently and confidently.

bottom of page