Be Alert to Possible Fraud Schemes

The Federal Housing Finance Agency is encouraging individuals who work in the mortgage industry to closely watch for possible fraud schemes that are emerging in the midst of the pandemic. Below are three of them and the solutions Credit Plus offers to combat them.

Appraisal fraud by individuals misusing flexible appraisal alternatives

  • Onsite and drive by appraisals can be safely conducted during the pandemic. Credit Plus offers nationwide coverage through a network of experienced, local appraisers. Through our partnership with Appraisal Nation, one of the nation’s leading full-service AMCs, Credit Plus provides complete valuation service management and compliance for lenders.
  • Automated Valuation Models are statistically-based computer programs that use real estate information such as comparable sales, property characteristics, tax assessments and price trends to provide an estimate of value for a specific property. They significantly reduce the time it takes to obtain a value estimation and are less costly than traditional appraisals. 

Application fraud by individuals exploiting borrower employment verification flexibility 

  • The Work Number®, a solution offered through Equifax Workforce Solutions* and the largest collection of payroll records contributed directly by employers, enables you to get fast validation of employment information and consumer income so you can make informed decisions. The Work Number database houses millions of employment records contributed by employers nationwide. This information is updated every payroll cycle, so you’ll always receive the most up-to-date information possible.
  • Manual verifications of employment are an effective alternative for individuals not found in The Work Number database. Credit Plus can manually verify employment and income, and provide you with the validation you need in just 1-3 business days. We follow a uniform, auditable process that ensures you get data you can trust.

Forbearance and foreclosure-rescue related fraud

  • Borrower attestation is an effective verification method you should really consider using. This best practice is another way to minimize your risk – and an easy one at that. Before closing, simply have your borrowers sign a document attesting that their income, employment and forbearance statuses haven’t changed before closing. This is considered a legitimate means of verification and it certainly can’t hurt.
  • Manual forbearance verification should be your last resort, should you need to confirm whether or not a borrower has an accommodation in place. Temporarily available during this pandemic, we can conduct a manual review to determine if an applicant is currently in forbearance. Note, these reviews follow a detailed process that includes conference calls with lenders and borrowers and therefore require significantly more time to complete.

Stay vigilant during these uncertain times and use the tools we make available to you to protect your lending business. For more information, please contact your Credit Plus Account Executive.

*Equifax Workforce Solutions is a business unit of Equifax Inc., Atlanta, Georgia. Credit Plus is an authorized reseller of products and services provided through Equifax. The Work Number® is a registered trademark of TALX Corporation, a wholly owned subsidiary of Equifax Inc.

 


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