Enterprises reporting a reduction in mortgage fraud in the industry? Now, isn’t that great news! It would have been better if there were some solid stats but the mere fact that insurers such as Genworth are coming out and going on the record saying that mortgage fraud is on the decline as good news.
In a recent article in the Globe and Mail, Stuart Levings, chief executive officer of Genworth MI Canada Inc., was quoted after an appearance at a recent conference as attributing the reduction in mortgage fraud to:
1. Tougher regulations
2. Better training
3. New technology
We would say that numbers 2 and 3 on this list have likely had the biggest impact. While tougher regulations may have resulted in fewer mortgage defaults, they don’t do nearly as much as education and technology to help lenders become aware of and prevent fraud.
In addition, Mr. Levings indicated that Genworth rejects an average of 7 out of 10 mortgage loans. This number seems quite high – and could be reduced by taking all steps at the application stage to vet that the information in the credit application is accurate.
This is where I loop back to training and education. An increased commitment to fraud education by organizations like CAAMP helps agents, brokers and lenders alike understand how fraud impacts the industry and also how to know what to look for. Events like the Fraud Summit which took place this past October go a long way to show managers how they too can learn new developments re: fraudulent activities within the mortgage industry in addition to fraud prevention initiatives.
Now let’s talk technology. Looking back 10 years, it was incredibly difficult, if not impossible, for lenders to validate the volume of information online that has now become accessible with today’s tech advances. There is no doubt that this is taking a bite out of mortgage fraud.
Using online tools like Purview which enable you to validate property and homeowner related information allows you to not only validate common information on every application but also to investigate things that seem fishy. In fact, as it relates to Purview there is even a fraud check feature in the lender product that assesses particular criteria when producing the report.
It really doesn’t matter how large or small your institution is, I mean you could be a small private lender and fraud can still happen to you.
On a side note – in the article referenced above, the writer goes on to comment on a major Canadian alternative mortgage lender right here in Canada who recently suspended 45 brokers after alleging that they had been using fake employment letters and misrepresenting income to get clients approved. Yet another example supporting why investment in fraud prevention is a need not a want.
Don’t let fraudulent deals cut into your bottom line. Education and technology, as well as stricter regulations, are helping to reduce the instances of mortgage fraud – keeping everyone safe.
For more about how Purview For Lenders can help you, please contact us today at 1.855.787.8439.