Lenders, Don’t Let Reduced Mortgage Fraud Rates Fool You
Mortgage fraud declined by as much as 25 percent in 2012 versus 2011, according to the Treasury Department’s Financial Crimes Enforcement Network. This marks the first such decline since the agency began tracking the statistic in 2002.
This is good news for today’s financial lenders. With mortgage fraud on the decline, many banks are eagerly opening their vaults again to borrowers.
A decline in fraudulent mortgages is definitely a good thing for the lending industry. Fraud drives up the cost of lending and is one of the key reasons many banks put in place stricter lending requirements. With rates declining, it is likely that banks will begin to ease some of those restrictions to speed up the loan process and attract some of the new buyers entering the real-estate market.
Risk still exists
Even though rates have improved, mortgage fraud still exists. Lenders must remain vigilant in protecting against high levels of risk. Risk management remains one of the most important tools lenders have for retaining profitability. A financial institution that eases its restrictions will need — now more than ever — to ensure proper risk management processes are in place.
Risk management solutions
Lenders need a reliable partner in their efforts to attract new mortgage business while minimizing risk. They should look to providers offering a comprehensive program that arms them with a more detailed customer profile, thus giving them better control of any decisions concerning risk. The data, which should cover everything from income and identity verification to tax and asset information, must go deeper than just credit scoring to better inform financial institutions and avoid fraudulent accounts.
Financial professionals can ride the trend of lower mortgage fraud rates to success with the help of these informative services.
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