A new real estate loan fraud detection product for lenders and investors promises to reduce loss due to fraudulent transactions while improving loan quality. Real estate loan fraud cost communities nationwide an estimated $1 billion in 2005, according to the Federal Bureau of Investigation.

Interthinx last week announced the launch of FraudGuard, which touts a “holistic approach” that analyzes an entire loan file to uncover fraud in every aspect of the loan application process.

“Today’s fraudsters are attacking on multiple fronts. Simply considering components of a loan is neither enough nor is it complete protection,” said Kevin Coop, president of Interthinx.

The new technology is powered by FraudNet, a network of data, pattern-matching analytics, which enables lenders to compare loan application information with data pulled from the proprietary Interthinx National Fraud Protection Database, 1003 (application) data spanning over 10 years, third-party data and internal shared data, according to a company announcement.

The data is then analyzed using a pattern-matching system designed to emulate the most current fraud tactics. The system employs models and search algorithms to spot patterns and commonalities between the loan information and previous instances of loan fraud.

“FraudGuard is the most comprehensive and progressive risk evaluation tool on the market today,” said David Subar, chief information officer of Interthinx. “Because Interthinx is the largest aggregator of application data in the industry, we can provide data/results that simply aren’t available anywhere else in the market place.

“Effective fraud detection requires a study in pattern identification, which is a function of identifying, isolating and tracking data. History of multiple loans, both valid and fraudulent, is imperative to compare a submitted loan both to data and heuristics (related ‘rules of thumb’),” said David Subar, chief information officer of Interthinx.

FraudGuard can be applied to a single loan or to a pool of loans, the company said.

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