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With any digital transaction, one of the biggest concerns is, “How do I know the person on the other end is who they say they are?”

In regards to eClosing, this is a particularly salient concern, as the financial stakes in the mortgage transaction are significant. The traditional, paper-based transaction, with all its inefficiencies and expenses, does make it fairly simple to verify the borrower’s identity because the borrower is sitting directly across the table. Where it gets tricky is when that borrower is sitting on the other side of a computer screen.

In addition to the borrower’s identity, lenders are equally concerned about the risk the borrower poses to their organization. A credit score and financials can paint a fairly detailed picture of the borrower’s fiscal behavior, but it doesn’t tell the whole story.

For example, many first-time homebuyers may not have a significant credit history. Thus, the lender cannot rely solely on that information to assess the borrower’s trustworthiness, which is really what creditworthiness is all about.

With its latest tool, IDMAXX, Pavaso has enabled lenders to achieve two aims with one solution. By leveraging a borrower’s network for both identity verification and character references, lenders can be assured that 1) the borrower is who they claim to be and 2) the total picture they have of that borrower, and the risk that borrower may pose, is accurate and complete.

Here’s how it works:

Through IDMAXX, the borrower sends a request to their friends and colleagues to validate the borrower’s identity and rate the borrower using a series of questions that address various aspects of the borrower’s character. Rather that providing an aggregate score, IDMAXX provides the lender with an average score for each question, taking into consideration the nature and length of the relationship between the borrower and the reference. To avoid potential ID fraud, borrowers can input their drivers license number.

IDMAXX is currently in beta and being offered free of charge until the end of 2015. To access the tool, you must have a Pavaso account. Visit www.pavaso.com to sign up for your Pavaso free account.