MortgageOrb recently interviewed Brent Chandler to learn more about how the mortgage industry is dealing with the pesky problem that never seems to go away:
Q: Fraud is an ongoing problem in the mortgage industry, even with numerous cross checks of information. What do you see most fraudsters trying to get away with when trying to obtain a mortgage?
Chandler: According to CoreLogic, more than 60% of fraud is committed during the origination process – and the specific area that has seen the biggest overall increase in the last year is income fraud. Income can be falsified by manipulating bank statements and W2s, borrowing money from a private source to temporarily increase assets or even “borrowing” someone else’s account information to qualify for a loan. It seems there is a new scheme and a new way to defraud the industry around every corner.
Q: Do you feel the industry is accurately addressing the issue of fraud? Where could it improve?
Chandler: I believe the industry is beginning to address the issue of fraud by considering the use of disparate third-party sources for the purpose of verification. Unfortunately, however, today’s crooks are innovative. They are constantly finding new ways to commit fraud, even as the industry struggles to catch up on the known schemes. Loan files also pass through a lot of hands, so sometimes it is tough to even know who changed information and whether it was a mistake or intentionally done.
Digital processes that reduce the number of times the loan file has to pass through someone’s hands will reduce the opportunity for tampering. Information should also be coming directly from the source, so you know the data is correct from the start.
To view the entire interview, please see “Person of the Week: Brent Chandler”