Reducing Risk

"I think you need fraud detection tools during the application process, pre-closing. There are a number of tools out there, but it's important to look at the file early on and review it again before it closes.

There are also a lot of tools to detect fraud at post-closing. At that point the horse is already out of the barn, but there are a lot of things you learn from the closing, including where the money went, that can help you decide who you're going to do business with. Typically, 100 percent of your loan production should be looked at on the pre-funding side and 10 percent of your production on the post-closing side should be reviewed, both for compliance and quality control."
— Tom McDonough, TenA Companies

"Mortgage fraud has increased exponentially in the last few years. As volumes decline, more lenders are chasing fewer loans, and the risk is certainly increased. Our strategy includes a technology-based solution that sends up a red flag during the origination process to alert lenders that further review of the proposed loan may be necessary. The data Fannie Mae has gathered on property values, Social Security numbers and other data points makes Desktop Underwriter a useful technology tool for lenders in identifying questionable loan transactions."
— John Sayre, Fannie Mae

"The quality of data and effectiveness of underwriting are of paramount importance. In many cases, lenders consider data quality to be the major benefit of their investment in front-end technology. Technology, when implemented properly, can enable lenders to do a lot of the data validation at the front end — looking for criminal records, unusual financial transactions and previous bankruptcies, and testing the reasonableness of collateral evaluations. Of course, it's important for lenders that want to increase production to qualify more applicants. In the last two years, we have seen that even the most sales-oriented companies are worried about data quality."
— Jeff Lebowitz, MORTECH-LLC.

"I believe an investment in technology is critical to the success and survival of the lender. It is absolutely the thing they should be paying the most attention to. Automating product selection gives the borrower the best option for their situation. It also enables lenders to quickly approve most loans and concentrate on loans that are the exception. Technology is also absolutely essential in trying to comply with all the current and future regulatory compliance rules. It's just going to get more and more complex."
— Roger Gudobba, Wolters Kluwer Financial Services