Lenders Beware: Mortgage Fraud is On the Rise
Financial institutions have a big problem on their hands. Mortgage fraud is on the rise, and Its costing lenders a fortune. In Q2 of 2020 alone, nearly one out of every 164 mortgage applications contained at least one instance of fraudulent information.
With the United States now experiencing almost record home purchases and mortgage applications, lenders must be aware of the threat, and take the proper precautions to prevent fraudulent loans from being issued.
The FBI says mortgage fraud’s a “crime characterized by some kind of material misstatement, misrepresentation, or omission in relation to a mortgage loan, which is then relied upon by a lender.” However, modern fraudsters have gone much further than simple material misstatements.
They’re stealing the personal identifiable information of people not looking for a mortgage and acquiring loans in their name, then transferring funds into illicit accounts. Additional frauds that lender must be on the lookout for include mortgage or property hijacking. This is where a fraudster illegally claims ownership of a property, unbeknownst to the actual owner, then applies for loans on that property, leaving both the true owner and the lender on the hook.
These types of frauds, and more, can be detected before funds are transferred into illicit accounts. But it takes more than the eagle eyes of fraud department to detect them.
Now, artificial intelligence tools, like those from ToolCASE, can analyze millions of data-points, in real-time, to detect pattern anomalies, fraudulent transactions, questionable account opens and closures and can help distinguish an actual bank client, or borrower, from a fraudulent one.
Better, AI can analyze all the data on mortgage application forms to help detect material misstatements, misrepresentation or omissions form borrowers both legitimate and fraudulent, allowing lenders to make the correct loan decisions in moments.
Read more about the rise in mortgage fraud HERE,
Or learn about the tool your institution can use to detect and prevent financial fraudsters before they get away with your funds, HERE