Verifications – Your PreClose Safeguard Options Explained

Verifications – Your PreClose Safeguard Options Explained

Who knows how or why, it's just a universal rule that some things just naturally go together – cake and ice cream, burgers and fries, movies and popcorn, mortgage and fraud.

Back in the 1920s and 1930s, bank robber Willie Sutton (aka – 'Slick Willie') was famed for being a polite and gentlemanly thief. Probably his biggest claim to fame, when asked why he robbed banks, Sutton replied, "Because that's where the money is." That, my friends, will never change. Banks and lenders will forever be targets. But the question is, to what degree?

Fraudster strategies and methods change frequently, but in reality, there are generally only a handful of areas for them to inflict their pain. When it comes to mortgage loan applications and originations, the usual suspects are:

  • Assets – asset information was inflated or fabricated
  • Credit – identity and/or credit history was misrepresented
  • Income – employment and/or income inflated or fabricated
  • Liabilities – misrepresented
  • Occupancy – intent to occupy subject property misrepresented
  • Property – material misrepresentations
  • SSN – discrepancy with SSN used to qualify the borrower
  • Title – misrepresentation of property ownership
  • Value – property value was artificially inflated or deflated, and there was a non-property related misrepresentation in the loan transaction

Let's be clear on one thing. While this post is limited in topic to the origination of mortgages, fraud has infiltrated the end-to-end mortgage ecosystem through servicing and secondary markets. Like Willie, they follow the money trail.

According to a report currently on Fannie Mae's website, titled, 'Mortgage Fraud Loan Trends – Investigative Findings 2005 – 2020,' key trends are as follows:

  • Substantial Improvement: Credit; SSN
  • Some Improvement: Property; Value
  • Relatively Flat: Title
  • Trending Worse: Income (worse by far); Liabilities; Occupancy; Assets

Frankly speaking, it is a bit shocking to see that half the areas are worsening, especially when you consider the significant improvements in data and technology. Verification vendors, data, and tools have never been better than right now, improving daily. These fraudsters can largely be defeated, STARTING TODAY! Engage the right vendor. Engage Informative Research.

Why Informative Research?

We are a complete one-stop-shop for all customer acquisitions, origination, verification, and portfolio retention needs.  We prevent the kinds of fraud in Fannie Mae's revealing report. Further, here are some additional ways we can help protect your borrowers and yourselves during the PreClose stage:

PreClose Credit Report

Quickly confirm your borrowers still qualify for their loan. A fully customizable report helps you identify changes between the initial credit report and funding. Identify new liabilities, tradelines, derogatory activities, and more


PreClose Monitoring

Receive instant notices when your borrower does anything that could jeopardize the closing. Get real-time alerts as soon as credit activity occurs


Full Verification Suite of Solutions

To help with your bottom line and eliminate the time you wait for customer documentation we offer a full suite of verification solutions including verification of employment, income, and assets.


Letter Of Explanation

Request more details from your borrower on any irregularities that pop up during the approval process – so you immediately determine whether to continue or abandon the deal. It's only fair that applicants get a chance to explain their situation so they can get a fair chance to qualify


With 10 different data sources and over 3,000 attributes, we have the best data to get you the high ROI you need. Come on over. Let us prove it to you. See why over 3,000 U.S. mortgage companies, banks, and lenders rely upon us every day. After all, we think RISK and MITIGATION also go well together.


Want to know more about verifications?

Check out Your Complete Guide: The Asset, Employment, and Income Verification Process for Mortgage Originations. 



Fannie Mae Report: