Fraud & Risk Mitigation

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DataVerify offers a wide array of mortgage fraud detection tools that can help protect lending operations of any size. As a recognized leader in risk mitigation, our fraud detection services are trusted by hundreds of recognized brands in the mortgage industry. With advanced analytics and reports which can be tailored to meet your needs, DataVerify helps lenders outmaneuver fraudsters and avoid monetary loss.

Protect Your Business Against Costly Mortgage Fraud

Mortgage fraud has become an increasingly costly problem for lenders in the United States. In 2022, every $1 lost to fraud cost U.S. financial services firms a staggering $4.23 compared to $3.64 in 2020, according to LexisNexis.

With more comprehensive data, many lenders are able to diminish risk and help improve loan quality. DataVerify clients have access to a digital suite of tools to assist fraud mitigation and help reduce the likelihood of monetary losses as a result of repurchases, foreclosures, and defaults.

Fraud and risk mitigation

Preventing Mortgage Fraud Starts with Understanding the Many Types of Fraud

Mortgage fraud comes in many forms, and that’s why it’s important to use all the tools at your disposal to evaluate each loan applicant.

  • False Identity: Also known as loan application fraud, scammers attempt to finance a home using stolen financial information.
  • Occupancy Fraud: A borrower is not truthful about the occupancy status of the property, falsely claiming that it will be owner-occupied.
  • Liabilities Fraud: This type of fraud occurs when an applicant does not make debt or loans known during the origination process — otherwise referred to as undisclosed debt.
  • Property Flipping: While not always fraudulent, this practice can become illegal when a home is bought below market price and immediately sold for profit after obtaining an inflated appraisal
  • Equity Skimming: A buyer will rent out a property without paying the mortgage or property taxes until the property is foreclosed upon.
  • Conflict of Interest: Individuals involved in the mortgage process, like brokers or appraisers, prioritize their own financial interests over the best interests of the borrower or lender.
  • Non-arm’s Length Transaction: This form of fraud involves individuals with close relationships engaging in transactions where there is risk of collusion, underreporting of property values, or other fraudulent activities that benefit one party over the other.
  • Inflated Appraisal Fraud: Inflated appraisal fraud occurs when a property is deliberately overvalued by an appraiser to deceive lenders into approving a larger loan than the property is actually worth.
  • Asset Rental: This fraudulent practice involves applicants temporarily borrowing assets in order to misrepresent their financial stability and qualify for a mortgage.

DataVerify Offers Effective Tools to Help Detect Mortgage Fraud and Reduce Repurchase Risk

Our experienced fraud specialists will work with you to determine the most effective fraud detection workflow for your organization.

Identity Verification

Help ensure that your borrower's personal information, such as name, birth date, and Social Security number, is accurate and consistent with the information provided in their loan application.

Occupancy Verification

Helps identify occupancy fraud, whereby a borrower misrepresents their habitation of a property.

Undisclosed Debt Monitoring

Identify debt and loans that may not have been disclosed by the applicant.

Assets and Liabilities

Assess their assets and liabilities, real estate ownership information, credit history*, debt to income ratio, and hidden debt.

Income and Employment Verification**

Assess an applicant’s income and employment status to gain an understanding of their financial stability and ability to pay back a mortgage loan.

NMLS Data

Evaluate National Mortgage Licensing System (NMLS) data to ensure compliance, protect customers, and reduce risk by helping to meet state and federal licensing standards.

Property Valuations

Assess the market value of the home with the help of an AVM (Automated Valuation Model), identify ‘subject to’ properties, and evaluate flip or foreclosure risk in the area.

Watchlists

Manage all watchlists required to originate loans, including investor, internal and all government lists for such activities as money laundering, terrorism financing and fraud.

MLS and Property Listing Data

Verify property details, conduct a market analysis, and evaluate the value of their collateral.

Flood Zone Determinations

Determine if the property is in a high-risk flood zone to help ensure insurance and regulatory requirements are met, and internal loan approval conditions are met.

Additional Risk Mitigation Services

Uncover REO properties, undisclosed real estate, foreclosure history, bankruptcies, liens, and judgments.

*Service provided by DataVerify affiliate
**Service provided by The Work Number® from Equifax

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