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In the first two parts of this series, I discussed the impact of a “purchase market” and “digital” on the fraud. Today, the last in the series, I want to outline some extra’s you can do to protect yourself and your borrowers.
What can you do?
You need to also ensure that any party with which you do business is taking the proper precautions to protect the information and money you provide.
What are they doing to identify and prevent fraud, of any sort? It’s one thing for you, as the lender, to have cybersecurity controls in place, but what about your vendors, including those who conduct the loan closings? Are you sure they have all the necessary controls to protect any consumer or company information entrusted to them?
What are you doing to:
- Verify the identity of each applicant?
- Validate employment, income and asset data? (Remember Day 1 Certainty is voided by fraud)
- Authenticate all parties to the transaction?
- Ensure money is wired/provided to the proper entities for closing?
This can get time-consuming and expensive. You need the technology that provides you with a rules-based process to allow a quick and comprehensive review of loans both before and after closing. This will identify loan and process defects for immediate adjustments and corrections along with identification of potential fraud and misrepresentations.
In addition to detailed, complete pre and post-close reviews, do you conduct careful reviews of all your vendors to ensure the safety and soundness of their operations? You better.
In the end, as the lender, in the event of fraud, there’s a very good chance that you’ll be the one left holding the bag.
Make fraud detection a top priority.
Get everyone involved. “See something, say something” needs to be your fraud detection motto. To deter criminals, make committing the crime as difficult as possible. Like most, they’ll look for the easiest targets. Don’t be one.
