Tuesday, June 05, 2007
Fair Isaac Tightens Standards to Stop Credit Boosting Practices
After the rash of articles this past weekend on th new wave of credit boosting services being offered over the internet, Fair Isaac Corp. announced that it will adjust its FICO scoring formula in a way that will remove authorized user accounts from consideration by the scoring model. This change will take place in FICO 08, which is exected to become available to lenders in September. This action is intended to ensure the continued reliability and predictive power of FICO scores and protect lenders and FICO scores from abuse of authorized user credit card accounts by a new kind of credit repair service that sells consumer credit card histories to credit applicants in order to purposefully misrepresent the applicants’ own credit history to lenders and other businesses.
“We will do whatever it takes to protect the reliability and accuracy of FICO credit scores for lenders, and to ensure lenders can continue to use FICO scores with confidence when making their most important customer decisions,” said Dr. Mark Greene, CEO of Fair Isaac. ”We will continue working with lenders, regulators and others in the credit reporting industry to end deceptive practices that fraudulently misrepresent consumer credit histories for profit.”
An authorized user is a person permitted by a credit account holder to use an account, typically a family member who is managing credit for the first time. Used legitimately, authorized user account information has helped both lenders and consumers by enabling lenders to use FICO scores when making credit decisions for consumers who are starting to establish a credit history. Fair Isaac’s research indicates that the next version of its FICO scoring formula will deliver increased predictive power without considering authorized user accounts.
Fair Isaac will work closely with lenders to help them implement and benefit from the FICO 08 score as it becomes available. As the company announced previously, lenders will be able to use the new version of FICO scores with minimal changes to their own operating systems. To make lender adoption easier and faster, the new scoring model will retain the same scoring range, score reason codes, minimum scoring criteria, inquiry treatment, and related model parameters as previous versions of the FICO formula.
mortgage fraud
Glad to hear this will be available to lenders in Sept.
Posted by on 06/05 at 10:45 AM
Credit misrepresentation is fraud. Plain and simple. The intent is to deceive a lender.
Posted by on 06/05 at 01:19 PM
I’m not sure why an internet story FINALLY got the ball rolling on stopping this scam - this “credit repair” technique has been used for years & has helped un-creditworthy borrowers buy houses they could not afford, which many times results in defaulted loans, contributing to the 20% foreclosure rate across the U.S. They had the capability to stop this a long time ago, I’m glad they are finally get around to it. What a stupid theory anyway - why does a family member (or any one else’s) acct help someone who doesn’t even own it? It simply doesn’t make any sense. Being an “authorized user” shouldn’t be ANY bearing on whether someone has credit depth - IT’S ABOUT TIME!!! STOP THE FRAUD!!!
Posted by on 06/05 at 10:57 PM
I find it very interesting that FICO is taking such a firm stand. When people obtain their credit report from sponsored sites (mycreditreport.com, etc.) the score can vary significantly from what a lender may obtain. In fact, all three bureaus are involved in a class action suit for the same. No wonder that the public is using credit boosting sites. None of the three bureaus or FICO will willingly help any consumer with regard to information on their credit report.
Posted by on 06/06 at 04:36 AM
This is a very positive step.
Posted by on 06/06 at 07:31 AM
This will help with the opposite problem as well - when someone with BAD credit authorizes some family member to use their credit card.
Posted by on 06/07 at 03:18 AM
Great to see an industry leader cinching up it’s belt. Definitely a step in the right direction.
Posted by on 06/07 at 03:32 AM
as far as i am concerned the scores have too much variance and we need a more standadized account.how you can have a score of 400 on eqifax,500 on experian,and 600 on transunion is beyond me . also inquiries should be stricken from the credit code because too many of them are not legitimate.everytime you are shopping for new carinsurance,a mortgage,and or any other thing that people are checking out should not penalize you.
Posted by on 06/08 at 03:45 AM
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Mortgage Fraud Risk Index Jumps 11 Percent, According to Verisk Analytics Subsidiary Interthinx
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The report...indicates that the overall Interthinx Mortgage Fraud Risk Index surged more than 11 percent from the previous quarter...
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The prosecution and defense rested Thursday in the mortgage fraud cases against Teresa Marie WIlson and Angelo Surveo Williams.
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A Wyoming woman is facing felony charges accusing her of stealing her sister's identity to obtain a mortgage...then defaulting on that mortgage, leaving taxpayers on the hook.
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In San Francisco, Mr. Russoniello said he is trying to crack down on cases like mortgage fraud, though he doesn't have the budget to hire additional white-collar prosecutors.
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MyFoxOrlando.com
During the real estate boom two years ago, some units were going for a half million dollars. Now some are short selling for just 50 grand.
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A developer and nine other people, including a former salsa singer, have been charged in an alleged $14 million mortgage fraud in Puerto Rico...
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Attorneys will deliver opening statements this morning in the trial of Mark Strodtman, who is accused of bilking homeowners in a mortgage scheme years ago.
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Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration...
Mortgage Fraud Probe Nets 105 Across State
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At least one local man is among 105 people arrested across the state following a nine-month investigation into organized mortgage fraud.
Mortgage Fraud Increases
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The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
