Skip to main content

Norma Murphy joins Plaza Home Mortgage

Jul 02, 2008

Zoot identifies significant savings opportunities associated with upcoming Red Flag regulationsMortgagePress.comZoot, red flags, mortgage fraud, FACT Act Zoot, a provider of advanced instant credit decisioning and loan origination solutions, has identified significant savings opportunities associated with fraud reduction and recovered credit applications during the development of its Red Flag solution suite. Section 315 and Section 114(B) of the FACT Act mandate financial institutions manage and reduce the risk of identity theft fraud for customers and require compliance with these Red Flag regulations by Nov. 1, 2008. Credit applications are commonly declined due to an address mismatch or other red flags highlighted in the upcoming Red Flag regulations. In addition to mitigating the risk for fraud and identity theft, clearing these flags and recovering the application results in a significantly higher number of approved applications. During the process of establishing best practices and evaluating return-on-investment (ROI) metrics for its Red Flag solution suite, Zoot uncovered the following statistics from top financial institutions: • 20 percent of approved credit card applications, based on industry averages, contain an address mismatch that must be handled before granting credit; • $567,000 in revenue can be recovered from a pool of 100,000 prescreen applications (assuming a 30 percent acceptance rate); • 22.5 percent increase in revenue provided by recovering applications; • 9,450 percent return on investment for implementing an automated solution (based on 6,000 recovered applications from a pool of 100,000); • $54,000 of savings per 100,000 applications were realized through automated review for consumer initiated applications; • 50 percent reduction in fraud losses from that same application pool is a savings of $2 million. "Aside from meeting governmental regulations, financial institutions have a lot to gain through compliance with Red Flag rules," stated Dennis Dixon, president of Zoot Enterprises. "The ability to automate applications that normally require manual review decreases the cost per booked account. By reducing fraud losses and clearing address mismatch applications a significant return on investment can be achieved." For more information, visit www.zootweb.com.
About the author
Published
Jul 02, 2008
Co-Founder Mat Grella Terminated From NEXA

NEXA CEO Kortas states negotiations regarding the buyout will continue.

Mar 27, 2024
Comings And Goings At AmeriHome

Chief Operating Officer John Hedlund announced his retirement on Thursday in a LinkedIn post.

Mar 22, 2024
Rocket's Tim Birkmeier To Retire

Birkmeier is bidding farewell after a 28-year career at Rocket Companies.

Mar 21, 2024
How NAR’s Settlement Impacts Homebuying

While the settlement's silver lining is that homes are expected to become more affordable, many uncertainties loom over the housing market.

Mar 19, 2024
NAR Reaches $418 Million Settlement

The association agreed to give home sellers the option of compensating agents.

Mar 15, 2024
U.S. Non-Bank Mortgage Lenders Surge Amid Industry Consolidation, Fitch Ratings Reports

As smaller players exit the market, scaled originators like UWM and PennyMac Financial dominate, but challenges persist with low origination volume and pressured margins amidst rising interest rates.

Mar 14, 2024