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What Lenders Should Know to Combat Fraud

By James Comtois, National Mortgage News Online > Compliance and Fraud

March 5, 2007

 

Of late, mortgage fraud has risen and is looking to continue rising. With the industry becoming more paperless — therefore more susceptible to identity theft — as well as high home prices and low interest rates, there are many more opportunities and incentives for fraud to take place. In a report released in November 2006 by the Financial Crimes Enforcement Network, there has been a staggering increase in filings of Suspicious Activity Reports to the Federal Bureau of Investigation — by 1,411% — pertaining to suspected mortgage loan fraud between 1997 and 2005.

 

Wednesday, March 7, 2007

Grand jury indicts Plano man with mail fraud and making false statements in used car sales

By Pegasus News wire

 

A federal grand jury in Dallas indicted Massoud Mortazavi-Koupai of Plano with six counts of mail fraud and three counts of making a false statement on transfer of a used motor vehicle, related to a fraudulent scheme which included concealing structural damage and odometer discrepancies. It is anticipated that Mortazavi-Koupai, 46, will surrender to federal authorities and then appear before a U.S. magistrate judge.

 

Since fraud is continuing to grow, mortgage banks need to be more proactive in protecting themselves against mortgage fraud schemes, whether the scheme is from a borrower falsifying an application to a broker engaging in a multi-home flipping scheme.

According to a forensic accountant specializing in analyzing cases of mortgage fraud, in order to fight against this increase in fraud, there are a number of ways mortgage banks need to be more aggressive in examining loan applications for signs of potential fraud.

“With rates relatively low you’re able to get a number of buyers that can get into homes that they may not otherwise get into and applicants fudge applications to get borrowers qualified. A lot of that happened in 2006 and I think you’ll see more of that in 2007 as interest rates [remain] relatively low and prices [remain] high,” said Ivan Garces, a partner in the forensic accounting/litigation consulting division of the accounting firm of Kaufman, Rossin & Co.

... Full Story