Insider Fraud Bigger Problem Than Consumer

Part 1 of a 2-part interview (Part 2: Turning the Tide)

By Mark Fogarty, National Mortgage News Online > Compliance and Fraud

March 9, 2007

At the Mortgage Bankers Association’s annual Servicing Conference in San Diego, I asked a roundtable of servicing vendors to talk about fraud issues. I got some great stuff. Even though they were all vendors, I heard that technology is also the bailiwick of fraudsters who are getting ever better at duplicating docs. I heard that insider fraud trumps consumer fraud by a wide margin. I learned… but why not hear it from the voices of the industry themselves? My participants were Damien Weldon, director, collateral risk analytics, First American Loan Performance, San Francisco; Chris Saitta, president, REO Trans, Los Angeles; Allan Martin, chief executive, Mortgage Contracting Services, Tampa; and Cary Burch, chairman and chief executive, Lender Support Services Inc., Poway, Calif.

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.

MARK: FBI Suspicious Activities Reports have tripled in the last couple of years, from 10,000 to 35,000. That is an indication that fraud is blooming in the business. I wanted to get your sense on the scope of the problem. How big is it? How long will it take to get it under control? And how do you reverse the wave of fraud that is paralyzing the business currently?

CARY: With the fraud issues we are facing in the market, the technology tools that are being used has really helped facilitate and created a much more bigger challenge for the lenders when it comes to credit quality and when it comes to the loans. ...

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