LOVELAND, Colo.--(EON: Enhanced Online News)--Kroll Factual Data, Inc., a leading provider of risk mitigation and verification services to mortgage lenders, banks and credit unions, announced today a 2.59 percent average increase throughout the country of possible fraudulent activity associated with loan applications processed by the company between the second and first quarters of 2013. The significant increase—the highest in over a year—does not bode well for lenders, who are just weeks away from having to comply with stringent loan quality regulations from the Consumer Financial Protection Bureau (CFPB) as well as a new set of reseller guidelines from GSEs.
“After quarterly fraud increases around 1 percent for the past year, the jump to 2.59 percent comes at a challenging time for the industry”
“After quarterly fraud increases around 1 percent for the past year, the jump to 2.59 percent comes at a challenging time for the industry,” said Rod Bazzani, President, Kroll Factual Data. “Lenders already have a full docket preparing for the new regulations from the CFPB that take effect at the beginning of the year. Combine this with increasing levels of potential misrepresentation, and it becomes critical that lenders invest now in the resources and processes necessary to help mitigate the risk of fraudulent loan activity.”
Kroll Factual Data examined metropolitan statistical areas (MSAs) with at least 1,000 loan applications per quarter. Using its proprietary risk analysis and verification engines, Kroll Factual Data isolated certain files that may contain indicators of potential mortgage origination fraud. The top five MSAs posting quarter-over-quarter increases of potential fraud include Philadelphia, Pa.-N.J. (35.50%); Greenville-Spartanburg-Anderson, S.C. (35.44%); a top-five repeat from last quarter, Barnstable-Yarmouth, Mass.(26.04%); and Miami (25.32%) and Jacksonville (24.60%), both in Florida.
|The following MSAs comprised the top 10 for increases in potential fraud (FY13 Q2 compared with Q1):|
|6.||Norfolk-Virginia Beach-Newport News, VA-NC||18.05%|
|7.||Oklahoma City, OK||17.80%|
In anticipation of the new regulatory oversight on loan quality, Kroll Factual Data has designed a suite of comprehensive information and analytical tools to address major components of the lending decision-making cycle. These include its LoanFocusSM suite of prefunding and post-closing outsourcing services as well as credit and capacity, identity and investigation, collateral and property, and business and professional verifications. In addition, over the past year, several industry-leading providers of loan origination and loan servicing software systems have integrated numerous Kroll Factual Data products into their systems, with a goal of helping lenders comply with the Fannie Mae Loan Quality Initiative.
Among the top 10 MSAs with decreases in potential fraud, Iowa City, Iowa and Wilmington, Del., posted significant decreases of over 30 percent. The complete list of the top 10 is as follows:
|The following MSAs comprised the top 10 for decreases in potential fraud (FY13 Q2 compared with Q1):|
|1.||Iowa City, IA||-33.68%|
|7.||Fort Pierce-Port St. Lucie, FL||-14.74%|
|8.||Fort Collins-Loveland, CO||-14.62%|
|9.||Johnson City-Kingsport-Bristol, TN-VA||-14.41%|
About Kroll Factual Data
Kroll Factual Data, Inc. is a provider of independent verification services to mortgage lenders and investors, banks, and credit unions. For more than 25 years, Kroll Factual Data has helped clients confidently make timely, accurate decisions that reduce risk, enhance safety and soundness, and increase profitability. By aggregating and analyzing information, Kroll Factual Data helps its customers protect financial assets and comply with regulations. For more information, visit www.krollfactualdata.com.