The Mortgage Asset Research Institute (MARI), a ChoicePoint (NYSE: CPS) company, today announced the release of the MARI Loan Fraud Alert Service Pro (LFAS Pro).
MARI LFAS Pro, with its patent pending technology, assists lenders in discovering fraudulent loan applications prior to funding through a combination of comparative loan application analysis and Identity Risk Management tools. Lenders will now have the ability to have a more comprehensive view of their loan portfolio, not previously available in the market.
MARI's original LFAS is a comparative loan tool that helps uncover patterns of common mortgage fraud schemes during origination. LFAS Pro takes that process one step further, providing valuable insight into both the identity of applicants and information about industry professionals that comprise the loan transaction, such as the mortgage broker, appraiser and closing attorney. LFAS combines the industry-leading MIDEX credentialing database with ChoicePoint's Identity Verification tools (widely used in the banking industry for account openings) and adds the advanced capabilities of a comparative analysis loan tool.
"We are extremely excited about LFAS Pro for lenders since many common fraud schemes such as chunking, flipping and multiple closings would be much more evident to lenders in pre-funding," said Tom Chmielewski, vice president, ChoicePoint Financial Services. "Lenders now have a tool that helps them ensure the loans they are about to make are not tainted by fraudulent activity and detect patterns indicative of fraud within their loan pipeline and other contributed lender pipelines."
MARI's enhanced mortgage fraud solution provides a single view into industry-contributed loan transactions through an intuitive user interface. The transparency provided by LFAS Pro helps identify hidden patterns of fraudulent loan schemes perpetrated by applicants, industry insiders and their co-conspirators. By helping identify risk at the earliest stages, lenders can improve overall loan quality, reducing loan processing costs and increasing loan profitability as a result.
LFAS Pro integrates several components of an effective Identity Risk Management program that help determine if a loan transaction may expose a lender to risk by combining services for:
- Identity Verification: ChoicePoint's Identity Verification Service helps authenticate and verify the identity of a borrower, and determine if a borrower is using synthetic aliases or Social Security numbers.
- Licensing Verification: The Mortgage Industry Data Exchange (MIDEX) - the industry standard for licensing and credentialing, and the only industry-contributed repository used for initial and ongoing verification and credentialing of professionals and companies - helps users quickly identify whether brokers, appraisers and realtors are appropriately licensed and if they have been licensed in a different profession or state.
- Professional Credentialing Verification: MIDEX can also help discover adverse activity, public disciplinary and other derogatory information about professional third parties.
"According to the Federal Bureau of Investigation based on existing investigations, a staggering 80 percent(1) of all reported mortgage fraud losses are committed by industry insiders," said Merle Sharick, vice president and national manager of business development for MARI. "The mortgage industry is going through a dramatic transformation, as standards are tightened and processes are changed, so must the tools that detect and prevent fraud. By incorporating a holistic solution like LFAS, lenders can ensure that the loans they make have less risk involved, which contributes to more predictable revenue in the long run."