Interthinx offers robust analytics to detect mortgage loan occupancy fraud and undisclosed propertiesMortgagePress.comInterthinx, FraudGUARD, ownership misrepresentations, risk mitigation, mortgage fraud prevention
Interthinx Inc., a provider of proven risk mitigation, mortgage
fraud prevention, and regulatory compliance tools for the mortgage
industry, announces a new module available through FraudGUARD to
identify and manage potential occupancy and ownership
misrepresentations in loan files. The module includes an
unparalleled analysis of a borrower's history of property ownership
and critical new alerts within the proven FraudGUARD scoring
system. Interthinx customers are able to detect undisclosed
properties that can skew debt-to-income ratios, and discover
investors who falsely claim owner occupancy status in loan
applications. Detection of these misrepresentations gives lenders
the opportunity to investigate and avoid mispricing loan products
before a loan is funded.
"Borrowers misrepresenting occupancy status is one of the most
common types of mortgage fraud, representing slightly more than 10
percent of the applications scored by FraudGUARD as 'high risk,'"
said Stacey Louie, senior vice president of product development and
engineering for Interthinx. "Our supplementary data set allows for
nationwide searches of borrower-owned properties, and our
exception-based alerts help our clients discover other borrower
property liabilities. Occupancy issues are identified, as well as
seller carryback financing, foreclosures, and unidentified
addresses used by borrowers. All of these are indicators of
potential fraud, which cannot be tolerated in this market."
Occupancy fraud occurs when borrowers try to disguise an
investment property by representing it as the primary residence.
Because lenders typically charge a higher interest rate for
non-owner-occupied properties (which historically have higher
delinquency rates), the false representation results in the lender
underestimating the risk, mispricing the loan, and being
overexposed to loss.
Inaccurate borrower debt-to-income ratios can stem from
undisclosed properties. Since debt-to-income ratios are a crucial
underwriting criterion used to determine eligibility for most
mortgage loans, misrepresenting occupancy and omitting other
borrower-owned properties artificially lowers the debt ratio, which
can lead to a borrower fraudulently qualifying for a larger loan or
a lower interest rate.
The new occupancy and ownership module of FraudGUARD analyzes
detailed borrower ownership data from deed and assessment records
and helps lenders assess a borrowers ownership history with
interactive timelines.
"The analysis and underlying data provided is not only the most
comprehensive in the marketplace, but is the easiest to use because
the format was designed to promote operational efficiency,"
concluded Kevin Coop, president of Interthinx. "One of our many
goals is to consistently provide our customers with crucial and
digestible data to help them make the most informed lending
decisions based on borrower activity."
For more information, visit www.interthinx.com or www.iso.com.
