Increase in Fraudulent Loan Applications Necessitates Vigilance for Lenders

Mark J. Mandell, Esq.

A troubling spike in fraudulent loan applications in Flint, Michigan between June 2012 and October 2012 is the highest in the nation. According to Kroll Factual Data, a Colorado-based lender verification service, Flint saw a 50.3 percent increase in fraudulent loan applications to banks, mortgage lenders, and credit unions. While fraud alerts saw declines in some areas of the country, these declines were offset by significant increases in other areas of the country.

“The spike in potential fraud is troubling, coming at the same time the mortgage industry is beginning to turn the corner,” said Rod Bazzani, president of Kroll Factual Data. More so, the increase in potential fraud poses a risk for lenders and highlights the need for lenders to continue to be vigilant.

The results of the study were announced just two weeks after the federal Consumer Financial Protection Bureau issued new regulations for borrowers. Such regulations include the need to verify financial records in order to ensure one’s ability to repay mortgages.

Kroll Factual Data examined multiple metropolitan areas and used proprietary risk analysis and verification engines to isolate files that contain indicators of mortgage origination fraud. While Flint saw the largest increase, other cities that made the top ten include Colombia, Missouri; Lancaster, Pennsylvania; and Tacoma, Washington. While most other cities that saw increases in fraudulent loan applications hovered around an increase of 20 percent, Flint saw an increase of around 50 percent. Nationally, fraudulent loan applications increased just 1.1 percent. In comparison, the increases in Flint are quite troubling.

If you have questions about criminal matters, fraud or other legal issues, please contact Mark Mandell or Tariq Hafeez at 248.380.0000 or online at www.MichiganFraudLawyer.com.

To learn more and read the original article, please visit: http://www.mlive.com/business/mid-michigan/index.ssf/2013/01/flints_increase_in_fraudulent.html