Consumer loan fraud invades real estate
|August 9, 2004|
Increase in home loans using stolen identities disturbing, researcher finds
Lenders get good marks for managing "real" credit risk such as a person's ability to repay credit granted or cases of insider loan fraud, but risk managers often overlook the potential for fraud in areas other than card portfolios, new research from TowerGroup has found.
"As the frequency and types of consumer loan fraud continue to evolve, we are seeing the emergence of fraud in secured portfolios such as home loans," said Christine Pratt, senior analyst in the consumer lending and bank cards practice at TowerGroup and author of the research.
A particularly disturbing trend, Pratt said, is the rise in real estate loans initiated by thieves using stolen identities. She said the dollar damages possible for institutions targeted by thieves for mortgage or home equity loans against property they don't own is staggering.
"One takeaway for credit managers from TowerGroup's findings is that organizations marketing those types of products must check and double-check existing procedures and technologies to ensure that they are on alert for this type of activity, so that their customer information does not fall into the wrong hands," Pratt said.
Some highlights of the research include:
Copyright: Inman News Features