Filed under: Mortgage Fraud — admin @ 8:00 am
Mary Kladde
When is the right time to be checking for Fraud?
All the time is the right answer, but practically speaking, fraud checks should be performed as a standard function of underwriting. Why go through the entire process to run the check when drawing documents for closing only to find that there are fraud related issues and alerts?
What a waste of time and energy on the cost of personnel and materials …which ultimately translates into money further lowering your net bottom line income on a per file basis!
Underwriting is where the “buck should stop” related to fraud. Has the lender and/or loan officer been cleared related to licensing? Are the borrowers good to go? Has there been an unusual amount of activity related to a given property address?
You shouldn’t wait until closing, shipping, or purchasing to discover there are issues. The tools exist to assist. It is just a matter of initiating a process change.
Filed under: Mortgage Fraud — admin @ 9:36 am
Mary Kladde
This story appeared in the MBA Tech Newslink on April 1:
New research from TowerGroup, Needham, Mass., predicts that losses from mortgage fraud will reach $2.5 billion in 2008 and that comparable losses could continue for several years to come.
The report, U.S. Mortgage Fraud: Types, Trends and Detection Tools, found that the scope of fraud—by and against lenders—continues to increase, despite renewed efforts by lenders and law enforcement to crack down. The report said lenders will respond to fraud by deploying technology tools to assist in detection and prevention and that their annual spending on such tools will reach several hundreds of millions of dollars in the next few years.
I also just read a blurb about the MBA’s wholly owned subsidiary, Lender Technologies Corp., in the 4/1 regular MBA Newslink putting out a RFP Request for creating a national database to help prevent and detect mortgage fraud.
I find it very interesting that with all the headlines fraught with stories, concerns, expressed need, and reaction towards fraud that lenders and investors seem slow to move on using tools that already exist and are accessible.
Fraud tools and technology exist today. Fraud tools and the corresponding technology existed 3 years ago. The problem is not having the tools to help detect fraud. The problem is that lenders are not using these tools because they are not required by purchasing investors when loans are being bought and sold.
You get what you ask for right? If you tell a little kid they have to wash their hand sbefore giving them a piece of candy, what is the result? 9 times out of 10 you get Clean Hands…at least that’s the way it works in my house.
Filed under: FHA Bailout, Global Economy, Mortgage Industry Trends — admin @ 10:13 pm
Ruth Lee
I have said it before:
“…I could not help but cringe when I saw the proposed legislation for FHA to purchase and refinance “underwater” mortgage loans. It would essentially make FHA the largest scratch and dent lender in the market.”
I will say it again.
This story from the Wall Street Journal reinforces how much our industry is interconnected with both the US economy and the global economy. Our industry needs to be educated about global economics and understand just how extensive the effects of our actions are. These types of reports also demonstrate how critical a return to quality in lending and a renewed focus on quality control are to the total recovery and future viability of the mortgage market and our industry:
A new report from Standard & Poor’s indicates that a government bailout of Fannie Mae and Freddie Mac would cost upwards of 10 percent of gross domestic product (GDP) and jeopardize the United States’ AAA rating. According to the credit rater, “Even though . . . credit damage from GSEs is unlikely, the greater risk to the U.S. lies with them than with broker-dealers.” The report notes that a bailout of broker-dealers would cost the government less than 3 percent of GDP, with the bailout of Bear Stearns by the Federal Reserve pegged below 1 percent of GDP.
Filed under: Mortgage Industry Trends — admin @ 11:00 am
Titan Lenders Corp was featured in this great Mortgage Technology article highlighting vendors that are utilizing innovative Internet marketing and communications to reach out to the mortgage industry and other markets:
“Not unlike other industries, mortgage businesses are increasingly reliant upon the Internet to find, analyze and gain consensus on resource selection and management, such as the search for lending technology solutions. Lenders and the vendors serving them are increasingly discovering the benefits of online “window shopping” for technology and service solutions as these habits become more natural in their personal lives. As this trend progresses, successful vendors are challenged to communicate effectively with lender prospects via the Internet channel; and to present the “storefront” and product lines that most closely match their target prospects’ desired solution. “
Click here to read the full article.
Filed under: Paulson's Blueprint — admin @ 11:09 am
Ruth Lee
I am quite confident that the industry’s skepticism of the Blueprint comes down to the notion that: the building is on fire…and Paulson is focused on the finer points of the master safety plan. In addition, why get all up in arms scouring the minutiae of the 218 page Blueprint, when it requires legislative action that will most certainly not get done prior to the end of Bush’s presidency? The document focuses on re-engineering the federal banking regulatory landscape. It pares down some of the antiquated, leverages inefficiencies…blah blah blah. But the fact is… it is a lame duck proposal sitting in a shooting range of issues.
If you haven’t read about the proposal, there are some good articles here, here and here.
