Today’s volatile loan market requires the ability to uncover any hidden dangers that could sabotage your loan portfolio. Few things pose a greater risk or are harder to detect than fraudulent loans.
FraudDetector Plus from LPS Valuation Solutions enables mortgage originators, secondary market intermediaries and investors to identify and manage collateral risk.
Get access to all the information that you need to redlight potentially fraudulent loans, starting at the point of origination. With FraudDetector Plus, you’ll quickly receive the results in the form of an easy-to-read confidence score, similar to a FICO™ score, along with stoplightstyle risk ratings. You’ll also get a detailed, five-page, automated collateralrisk assessment report that assigns a risk rating to the underlying collateral valuation of a property, using proprietary and public databases. The report will help you evaluate the quality and loss potential of real estate collateral before a transaction is completed.
FraudDetector Plus Risk Assessment Report Features Identity and Borrower Fraud
The identity and borrower fraud section of the report searches numerous potential-risk indicators to determine the level of risk associated with each potential borrower. This includes multiple verifications of the borrower(s) name, address, Social Security number, phone number and other pertinent information. The results of the verifications are summarized and assigned an identity-and-borrower fraud score that indicates the severity of detected risk factors for identity theft, intentional misrepresentation, and fraud or elevated credit risks.
Occupancy Fraud
The occupancy fraud risk rating includes a confirmation that the borrower’s stated occupancy of the property matches public data sources and then compares that information to the typical owner occupancy rate in the neighborhood. An additional verification checks for consistency between the property address and taxpayer’s mailing address. Consideration is also given to the distance between the borrower’s home and workplace, based on phone numbers provided by the borrower.
Overvaluation Potential
The overvaluation risk rating considers several important risk elements, including:
- Comparison of the appraised value or the borrower’s estimated value
- An automated valuation model (AVM) value estimate
- Analysis of the quantity and quality of comparable sales data
- Review of any previous valuations
- Sales history of the subject property
- Population density
- Median home values
- Median income levels
- Property liquidity
With regard to property liquidity, the analysis incorporates several factors. First is the historical and recent volatility of prices in the neighborhood of the subject property. Second is the degree of homogeneity or heterogeneity of the neighborhood. Third is how typical or atypical the subject property is, relative to the surrounding area.
Suspicious Transaction Risk
Capitalizing on the broad range of public and proprietary real estate information available to FIS Valuation Solutions, the suspicious transaction risk rating considers several important elements:
- Review of the subject’s current ownership
- History of previous transactions/sales
- Length of time of ownership
- Delinquent taxes
- Total number of loans
- Number of recent neighborhood sales
- Area housing turnover
- Also, previous sales alerts, LTV, multisale, REO and notice-of-default history are all flagged and compared to neighborhood norms.
In-depth Fraud Potential Reporting
The report summarizes and quantifies factors that indicate a higher likelihood of foreclosure due to fraud or intentional misrepresentation. The report is a fast and highly predictive tool that identifies and manages collateral risk. The risk score identifies potential overvaluation of the subject property, utilizing vast residential property data sources, proprietary home-price forecast indices and loan attributes. What results is a tool that provides consistent, objective and actionable information for mortgage originators, mortgage servicers, secondary market intermediaries and investors.
For more information on how FraudDetector Plus can protect your loan portfolio, CLICK HERE or call 800.282.1104 today.