To process a borrower's name for a home loan application, lenders must verify the name's legal accuracy across all documents. This includes confirming the name matches government-issued IDs (e.g., passport, driver's license), tax returns, and Social Security Number (SSN). Discrepancies in spelling, spacing, or middle names must be resolved by cross-referencing court records or official change documents. Lenders use automated systems like the Social Security Death Index (SSDI) to validate the name-SSN link and ensure consistency with legal records. Borrowers must also provide proof of name changes, such as marriage certificates or court orders, to align the application with current legal standings.

Accurate name processing is critical to prevent identity fraud, comply with regulations like the Equal Credit Opportunity Act (ECOA), and ensure underwriting integrity. The Consumer Financial Protection Bureau (CFPB) reports that 5% of loan applications face delays or denials due to name mismatches, underscoring the need for meticulous verification. The Federal Housing Finance Agency (FHFA) notes that proper documentation reduces mortgage defaults by 15%, as errors can mask financial instability or misrepresent liability. Additionally, the TILA-RESPA Integrated Disclosure (TRID) mandates precise name alignment to avoid legal penalties during closing. Lenders that fail to resolve name inconsistencies risk regulatory fines, reputational damage, and increased default rates. Thus, robust name verification protocols protect both borrowers and lenders while ensuring regulatory adherence and financial stability.