A mortgage insurance company has jumped into the fraud prevention business — using its automated underwriting system to flag loans at origination. The new service is one of many available to help mortgage bankers stem the growing tide of fraud.
The FBI recently reported it has 642 mortgage fraud cases pending — compared to 534 for all of 2004. Proliferating mortgage fraud has created a whole market for fraud prevention tools.
Genworth Financial Inc. announced it has a new service that checks loan applications for potential fraud.
Dubbed SecureFirst, the tool electronically analyzes loans submitted through Genworth’s automated underwriting platform to determine if the loan needs further review, the Richmond, Va.-based company said. In less than a minute, the results are reportedly delivered through the underwriting platform in reports that are custom tailored to parameters set by participating lenders and investors.
The tool was created by packaging Genworth’s AU system, its electronic imaging system, with three fraud and risk detection components from C&S Marketing, the announcement said. To determine potential fraud risk, the service analyzes the property and relationship details between borrowers, brokers, appraisers, specific market regions, and other interactions that are effective in detecting and preventing fraud and misrepresentation.
Genworth’s system is similar to that of AppIntelligence Inc. — which recently announced it partnered with Fiserv Lending Solutions to develop an application program interface between AppIntelligence’s fraud detection and prevention system and Fiserv’s loan origination solution.
While Genworth claims it is the first mortgage insurer to offer a fraud screening service, companies like AppIntelligence and The Mortgage Asset Research Institute Inc. help mitigate the risks of fraud.
MARI says it addresses, identifies and alerts the industry about mortgage fraud issues at the time of detection for subscribers of the cooperative portion of its MIDEX database. The subscribers agree to contribute data in order to receive data.
“Where there is money, people will be creative,” MARI founder D. James Croft has said. “That is why the mortgage industry needs to be diligent in its efforts to detect and spread the word on new types of schemes being perpetrated in the industry.”
Genworth’s service “will protect our lender customers by alerting them to a potential problem when the loan is locked for underwriting,” the company’s mortgage president Kevin Schneider said in the announcement. “Early preventative action can save them time, money and future headaches so a they can concentrate on driving loan production.”
