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How to be One Step Ahead of the Fraudsters

Your team will be as agile as you want them to be. The tools and resources you provide to them can greatly increase your competitiveness as a company, not to mention overall profitability. As with anything related to business, there are needs and wants, and, just as with any other business, anything that relates to losing money is likely a need.

Mortgage fraud is a prevalent issue that continues to cost lenders billions of dollars each year. Oddly enough, the reason that the numbers are so high isn’t primarily because of blatant criminals who concoct a scheme with the intention of causing you or a homeowner harm. Sometimes fraud can occur simply because a homeowner or even a broker has tweaked a customer’s information to get a deal done, not thinking of the end consequence to you: major losses if the customer can’t pay.

When it comes to the property being used as security on a deal, there is critical information your team should be looking at which can mitigate instances of fraud. These include:

  • Title fraud: test to see if there were recent mortgage discharges following a recent transfer where the mortgagor is the same
  • Value fraud: is the property value consistent with similar properties in the area?
  • Real estate fraud: test to see if there were recent and/or multiple sales activities on the subject property
  • Non-arms-length transaction: check the mortgagor’s last name against previous owners of the property
  • Risk level – is this a high or low risk relative to the market?
  • Was the last transaction a cash sale?
  • Are there liens?
  • Is the property owned by a corporation?
  • Is the real estate lawyer a previous owner, mortgagee or party to the transaction?

Your team should have access to a tool that, in a couple of clicks, can assess:

  • Active mortgages
  • Recent sales
  • Prior foreclosure or power of sale and frequency of power of sales in the area
  • Whether or not the vendor is a corporation
  • Active judgements
  • Active liens
  • Unusual discharges
  • Homeowner and property sales history and more…

Whichever tool you choose should be customizable and should flag applications that warrant further investigation.

Implementing technology that has specific features and capabilities to identify potential fraud will reduce your overall risk and potentially save your organization millions of dollars annually in loses.

Interested in knowing more about how you can mitigate fraud in your lending operation? Reach out to us for an assessment so that we can customize a solution that meets your needs. Please visit Purview today at www.purview.ca.

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