Data Facts Lending Solutions Blog

Data Facts is committed to bringing you news that affects you and your business. This article was written by Arthur Ebbs and originally appeared on The National Law Review's website.

As part of its business, Equifax reports publicly available civil judgment and tax lien information about consumers.  However, in multiple class action lawsuits filed across the United States, plaintiff-consumers alleged that while Equifax promptly reported civil judgment and tax lien information, Equifax did not update cancelled or satisfied judgments and liens with similar vigor or regularity. 

If you're in mortgage lending, you probably already know that undisclosed debt is the number one cause of mortgage fraud. Unfortunately, borrowers often take out new loans or make other significant changes to their debt situation within days of closing and that puts lenders in a precarious situation. Under the terms of the Fannie Mae Loan Quality Initiative, lenders are responsible for disclosing any new debt prior to closing, and to ensure you can meet that stipulation, you need to have a undisclosed debt monitoring process as part of your mortgage lending services solutions in place.

Bankruptcies, Liens, and Judgments Are Important Data!

Lenders have historically put significant weight on the presence of public records on an applicant's credit report. And with good reason. A recent study showed that consumers with liens or judgments as part of their credit history are twice as likely to default on a loan as those with no outstanding liens or judgments. 

In 2016, the bureaus were sued multiple times because of incorrect public record data being included on their credit reports. This happens because there are 10,000-20,000 "jurisdictions" of municipal authorities. Some of these records are sealed and the parties involved are not disclosed until it goes unpaid. The defendant then must file an action in the civil courts. Even in 2018, smaller courts still don't electronically publish information. In addition, public records are frequently logged with only one identifier, so it's not hard to get them "mixed up" with people who have the same name. 

Mortgage triggering is the process that some lenders use to gain customers.

If you are a mortgage lender and haven’t experienced it yet, lucky you.

Basically, lenders purchase these ‘trigger leads’ from the bureaus or other companies.

Here is some important information Fannie Mae shared recently about mortgage fraud. These statistics are based on results of 2016 and 2017 mortgage fraud numbers.

Third Party Vendor Management is a hot topic within the mortgage industry these days. 

One of the first (and most effective) steps you can take to limit potential third-party risk, is to properly vet and reduce the vendors of your mortgage lending services to only the ones that adhere to the most stringent of compliance standards.

When it launched a year-and-a-half ago, Day 1 Certainty promised to offer mortgage lenders more confidence and help save borrowers time in their loan application.

Wire transfer fraud is one of the most serious trends in the mortgage industry. Recent Fannie Mae and FBI fraud alerts on wire transfer fraud identify more than 14,000 instances of this fraud scheme over the last year. Under this fraud scheme “hackers” use social engineering or computer intrusion techniques to send out a change of wire transfer instructions with the “new” account information.

We all know the lending compliance is highly regulated and takes considerable resources. Lender compliance costs put a strain on lender profits, can be frustrating and seem unreasonable.

And they keep increasing.

After the Equifax security breach that impacted millions of US consumers, many have elected to place a credit freeze on one or all of their credit reports as a safeguard. While putting a freeze on your report helps protect against fraud, it can present challenges if the consumer needs to obtain legitimate financing.