Industry News

Mortgage fraud database spots loan scams

Alerts lenders in early stages, aims to cut losses

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A new mortgage fraud alert system is available to lenders through the Mortgage Asset Research Institute, the company reported Wednesday. The early alert system notifies participating companies about emerging patterns of alleged fraud in its early stages. Companies input mortgage-related information into the system and then can use the shared data to take action to mitigate potential risk and minimize their own exposure. "Fraud is a growing, significant issue in the mortgage industry and can have a widespread negative impact on consumers, neighborhoods and professionals," MARI general manager William Matthews said in a statement. One costly fraud trend, known as "property flipping," can temporarily inflate property taxes, depress long-term real estate values and diminish the quality of life in residential neighborhoods. Flipping is also a major source of financial losses to mortgage lenders, investors and insurers. Another trend that has grown is identity theft, which can take yea...