July 2012

TheMReport — News and strategies for the evolving mortgage marketplace.

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FEATURE lenders to see properties from different angles and in context with the local neighborhoods to help confirm appraisal information. Some lenders are also augmenting more traditional fraud-fighting efforts with examination of social media, which can uncover discrepancies with employment status and other potential fraud, according to Dahiwadkar. But simply having a number of enhanced Google Maps and Google Earth enable fraud monitoring and fraud prevention tools isn't enough by itself, Dahiwadkar says. "Lenders need to develop different checkpoints along the lending process. It's not enough just to have the rules (e.g., that income or other information will be verified)—lenders have to enforce those rules. Lenders have to keep up not only on fraud [prevention] technology, but also on the necessary training." But some of the documentation wasn't immediately available, so it was overlooked to push the loan through. Now lenders are making sure they have all of the necessary identity and income information and use verification at different points of the lending process to help ensure they catch fraud before dispersing any funds. "Until a couple of years ago, the only quality control [to prevent fraud] was conducted at the time of application," Dahiwadkar adds. "It's an evolving problem. [Criminals] will go to where the loopholes in fraud detection are," Meirink says. "So a lot of lenders have moved from origination to prefunding underwriting and even to post-closing." In some instances, enhanced monitoring enables lenders to examine any apparent fraudulent transaction, even after the deal closes, enabling them to negate the deal, according to Meirink. Though legislators and law enforcement Built to Fit Your Mortgage Lending Needs officials have stepped up their fraud-fighting efforts, fraudsters are expected to continue to evolve their attempts to try to find weaknesses in the newer defenses, industry experts agree. So the fraud-fighting efforts will need to continue to evolve as well. "There's a new sheriff in town; there's much more focus on preventing fraud. There are larger financial penalties, more people are being prosecuted. There is a trend of zero tolerance for fraud." — David Lykken, Owner, Mortgage Banking Solutions All-Inclusive Mortgage Lending Solutions • Web Production Portals • Web Origination • Embedded Closing Document Production • Imaging & Electronic Document Management (EDM) • E-Delivery to Investors • Secondary Marketing • Product & Pricing Eligibility Integration • Over 70 Interfaces in 16 Categories • Award Winning Support and Service Contact us today to learn more about how Mortgage Builder fits your needs. 800.850.8060 THE M REPORT | 33

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