Industry News

Industry must initiate anti-fraud action

Lender urges creation of national valuation registry

Fraud prevention in the mortgage industry requires licensing, simplification of the lending process and fewer exotic products, according to crime fighters and industry leaders. But "there's a danger to doing too much at one time," says David McLaughlin, senior assistant attorney general for the state of Georgia, which has enacted a seminal anti-fraud law. "One of the risks in some legislation is they're trying to do too much, to fix too many problems," says McLaughlin, who suggests that in trying to reform the problem, "we ought not mix it up with criminalization of certain behavior. That's where those bills get bogged down." He spoke at an industry conference earlier this month in San Diego. It is "up to us as an industry, to take a lot of action ourselves," says Richard Wohl, president, IndyMac Bank, Pasadena, Calif., noting that this is both a "good time and a bad time to be addressing mortgage fraud." The industry is in a "pronounced down cycle," says Wohl, conced...