Announcement: AccountChek now satisfies Freddie Mac's assessment of income requirement for loan applicants paid through ADP. Learn more

FormFree’s Brent Chandler Featured in National Mortgage Professional Magazine Article on Real Estate Fraud

FormFree is proud to be included in a recent article by Phil Hall in National Mortgage Professional Magazine. With insights from top industry experts, the article outlines the progress against mortgage fraud as the market evolves from primarily refinance-based to one driven by sales. That’s a healthy sign, but puts lenders at new risks and in need of better ways to verify an applicant’s Ability to Repay (ATR).

FormFree CEO Brent Chandler explains, “The Financial Crisis Inquiry Commission reported that between 2005 and 2007, $112 billion in fraud losses occurred in mortgage industry. The Commission pinpointed this was a direct result of lenders’ willful disregard to assess the borrower’s ability to repay. But, of course, lenders were not all to blame—investors buying loans and saying, ‘Hey, we need more loans.’” Chandler goes on to say that the industry’s fraud problem is not over. “Whether at the applicant or underwriter level, there are going to be folks who are compensated or incented to get business done at a rapid pace and high volume. When you have that, then you will have fraud.”

Progress Amid New Warning Signs

Ann Fulmer of Interthinx is the closest thing that anti-fraud advocacy has to a rockstar, and is also quoted at length in the article. Fulmer points out that although there are positive signs, the data raises some new concerns.

According to Fulmer, “Banks have become aware of how dangerous unchecked fraud can be. From the 30,000-foot view, fraud risk [is] down significantly since the boom.” However, she continues, “According to our mortgage fraud risk report, the risk of fraud is up very slightly from quarter to quarter. This concerns us. As the market shifts from refi to purchase, risk goes up. You have more actors involved and more moving parts in a purchase market than you have in refi. All additional moving parts bring higher risks.”

News Tools for a Changing Fight

As noted in the article, Ed Gerding, senior fraud and risk strategist at CoreLogic, agrees that the fight against fraud is far from won. More, it seems, the risks are evolving. “We are seeing an increase in three out of six risk areas: Income fraud risk, undisclosed debt income fraud risk and occupancy fraud.”
The overall message is clear. Although mortgage fraud will likely never be eradicated completely, innovative tools like FormFree’s award-winning AccountChek can help quickly verify a loan applicant’s Ability to Repay and greatly reduce the risk of fraud. We are proud of our role helping America recover and grow!

To view the entire National Mortgage Professional Magazine article, please see “The Changing State of Mortgage Fraud.

Related Articles

Eric Lapin on how alternative credit data creates inclusivity in…

Read More

Christy Moss Focuses On Fixing The Industry (Mortgage Women Magazine)

Read More

Mortgage lenders can now use FormFree’s AccountChek to satisfy Freddie…

Read More