AS RATES INCREASE andqualification becomes more difficult, the incentive to commit fraud increases. Oftentimes applicants will whisper sweet nothings
into your ears. Be cautious of their motivations—they
just might be into you for your money.
According to CoreLogic’s 2018 Mortgage Fraud
During the second quarter of 2018, an estimated
0.92 percent of all mortgage applications
contained fraud, which is 1 in 109 applications.
By comparison, in the second quarter of 2017, our
estimate was 0.82 percent, or 1 in 122 applications.
That may not sound like a lot, but consider this: if you
take 10,000 applications in a year, 92 of them have some
indication of fraud. Did you find all of them? Did any of
them fund? How confident are you? Also according to
CoreLogic, year-over-year income fraud risk increased
22. 1 percent, occupancy fraud risk increased 3. 5 per-
cent, and CoreLogic’s Fraud Risk Index increased 12. 4
percent. The trends suggest that mortgage fraud will
only increase for the foreseeable future.
So what does this mean for you? Is it time to closedown shop, quit dating, and move back into your parent’s
basement? No—but it’s important that you self-reflect
on where fraud can hide in your organization and how
to flush it out.
Tips and Tools to Help
Spot the Risks
BY NIMA J. VAHDAT, CRCM, CAMS
SHUT TERSTOCK/ ANDREUS K 24 | ABA BANK COMPLIANCE | JULY–AUGUST 2019