Identity theft and the loan officerJeff Barrtechnology, Internet, credit cards, bank information, credit scores
They just keep getting better. They are smarter and more
sophisticated. It started with stolen credit cards and has
escalated to bigger and more crooked mischief.
Today, it is a major crime ring developing around the world.
Technology is among its driving forces. This problem comes in all
sizes and from all corners of the world.
As technology gets better, so do the schemes to perform it.
Phishing scams on the Internet use pop-up messages or spam to
obtain important information about credit cards, bank information
or any data to steal your identity. It will cost a victim several
thousands of dollars and hours of lost time and sleepless
What is it? Why and how does it occur? What are the
ramifications for the loan officer? Identity theft is the unlawful
stealing of one's identity. There are several means of performing
identity theft, including:
-Your birth date;
-Your driver's license;
-Your mother's maiden name;
-Your Social Security number;
-Your credit card number;
-Your bank accounts; and
-Other government issued documents, such as passports.
Any one or combination of these with the intent to steal an
identity qualifies as identity theft. New ways to manipulate and
steal one's identity are being invented all the time. It can occur
in your own backyard or on the Internet.
What does this mean for the loan officer? Obviously, if one's
credit is hurt or destroyed, it will be difficult to provide a
mortgage of any kind. It is tough enough to obtain a loan under
regular circumstances. Borrowers do not need extra hurdles to jump
over. New purchases, delinquent payments and collections can occur
when one's identity is stolen.
A specific example recently occurred in Louisville, Ky.
According to The Courier-Journal, a home was fraudulently sold
twice (see "Home fraudulently sold - twice: Couple knew little
until arrest of three," by Jessie Halladay, The Courier-Journal,
Dec. 30, 2006). The real owners began receiving information at
their home from a man they never heard of. The two illegal deeds
were obtained for the house that the real owners have lived in for
40 years and used to obtain two fraudulent mortgages. The scam
involved an elaborate setup of stolen identities and, according to
the article, "The mortgage money would be set up under false names
and then withdrawn by the perpetrators, according to the complaint
filed by the U.S. attorney's office."
A fraud investigator from a local bank grew suspicious of one of
the subjects who tried to withdraw $290,000 from the bank. Police
were called and the subjects were arrested. Unfortunately, before
that, a prior closing had occurred and the bank was out $290,000.
The Courier-Journal further reported that neither of the two title
companies that signed off on the loans were believed to be involved
in the scam. This is an example of identity theft involving a loan
officer, buyer and seller.
You never know what to expect, but crooks keep finding ways to
beat the system. Check your credit report and, of course, make sure
your closing agents are top notch.
Here are some precautions to take:
-Control your Internet use. Do not use unsecured Web
-Purchase nothing over the telephone. Request the information in
-Place personal information in an envelope while in line at a bank,
grocery store or in any public area where numbers and information
can be linked to useful information for copying identity;
-Require second signatures for additional accountability;
-Put your work number on your personal checks - it will help
-Monitor your credit through the three credit bureaus - Experian,
TransUnion and Equifax;
-If you are suddenly placed for collections for no apparent reason,
inquire as to the root of the matter;
-You should be cautious of most situations and be careful to look
over your shoulder at all times;
-Shared personal documents such as credit card offers and bank
statements. Be leery of dumpster divers looking to re-create
important information that you disposed of; and
-Destroy all documents associated with a mortgage application,
including income and bank statements.
The mortgage industry is subject to much scrutiny. Be careful
and know what to do. Your clients' security and lives are riding on
Jeff Barr is a competent toastmaster and speaker in
Louisville, Ky., an adjunct professor of communications at the University of Louisville,
consultant and a mortgage loan officer. He can be reached at (502)
777-9555 or e-mail at [email protected]