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Equifax: mortgage fraudsters up their game

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guest | 21 Feb 2012, 04:42 PM Agree 0

“The greatest dollar value of detected fraud activity is within mortgage applications, at over $400 million," Equifax Canada John Russo said Tuesday. "This staggering dollar figure illustrates the need for continued vigilance by financial institutions to reduce this threat to both consumers and lenders."
That figure is derived from Equifax's fraud solution database for the financial sector, which revealed a total of more than $650 million in fraud incidents detected across Canada in 2011.Still, the dollar value around mortgage-application fraud accounted for more than 60 per cent of that $650 million worth of dubious deals. The actual number of mortgage fraud incidents accounted for about 13 per cent of the total number of fraud application incidents, according to Equifax.The highest relative fraud detection rates came in April and May – the busiest part of the spring season. November and December marked the lowest period of attempted fraud.More and more, fraudsters are using made-up identities, erecting a credit history around those names and seeking credit. While that activity represented as few as 300 cases in 2006, they accounted for more than 2,500 in Equifax’s national database last year.And while the credit bureau isn’t offering an exact breakdown on how many fraudulent applications were submitted via mortgage professionals, broker channel lenders and default insurers are increasingly calling on underwriters to better detect and weed out fraudulent applications.In fact, for the latest CAAMP-Maritz report, lenders and banks cited fraud as one of their leading concerns about dealing with brokers – a perennial worry mortgage professionals largely view as unwarranted.
  • John Carle | 24 Feb 2012, 05:52 PM Agree 0
    As a Realtor, I've noticed that many lenders are refusing applications from private sales or "non-mls listings". I think it's a safe assumption that this new policy is at least partly occurring to protect them from this staggering figure of fraud.
    There is no doubt that the policies and processes in place for mortgage lending needs to be revised though; it's shocking how "loose" some of the lending policies can be.
    However, I will defend the mortgage brokers. I see just as many mistakes or omissions being made by bank employees as I do from mortgage brokers; if not more.
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