Mortgage Fraud Blog Conference 2008

Rachel Dollar is an attorney and Certified Mortgage Banker who handles fraud recovery litigation for lenders and secondary market investors nationwide. She is a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar

Mortgage Fraud Blog is co-sponsored by Interthinx the leading provider of fraud services and solutions for the mortgage industry.

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- Man Indicted For Abuse of Foreclosure Process
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- Father, Son, Broker Indicted In Missouri Scam
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- Man Sentenced T 13 Years For Fraudulent Mortgage Rebate-Coupon Conspiracy
- Defendants Sentenced In Louisiana Mortgage Fraud Case
- 2 Indicted In Arizona Mortgage Fraud Scheme

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.

   

Posted by Rachel Dollar on 06/05/07 at 07:37 AM
News • Total comments: (8) (0) Trackbacks
  1. Glad to hear this will be available to lenders in Sept.

    Posted by  on  06/05  at  10:45 AM
  2. Credit misrepresentation is fraud.  Plain and simple.  The intent is to deceive a lender.

    Posted by  on  06/05  at  01:19 PM
  3. 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
  4. 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
  5. This is a very positive step.

    Posted by  on  06/06  at  07:31 AM
  6. 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
  7. 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
  8. 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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Today's News

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Real Estate Fraud Widespread, Insider Q&A Told
Orange County Register- California
As head of the California Department of Real Estate, it’s Davi’s responsibility to oversee the licensing and regulation of real estate agents and to investigate complaints.

Complaints Against Ohio Real-Estate Agents Rise
Cincinnati.com - Cincinnati, OH
Some of the most common complaints involve buyers upset over undisclosed property problems and agents not doing the marketing they had promised. There's also been an increase in mortgage fraud and criminal allegations.

Millions At Risk Of Foreclosure Fraud
Inland Empire News - Riverside, CA
The reason Carter, 55, is facing eviction, she says, is that she fell for a high-stakes scam that’s sweeping the nation, preying on the 1 in 11 consumers who are either behind on their mortgage payments or already in foreclosure.

Florida Comes Clean, Allowed Criminals to Enter Mortgage Industry, Prey on Consumers
By The Liput Group
In a stinging critique of the state's oversight of the mortgage industry, top Florida investigators found that state regulators failed to alert police agencies to crooked mortgage brokerages, ignored citizen complaints and allowed hundreds of people with criminal histories to peddle loans.

FBI's Mortgage Fraud Caseload Grows To 24
Toronto Star - Ontario, Canada
The FBI is investigating 24 cases of potential corporate fraud related to mortgage lending, up from 21 cases disclosed by the bureau in July, bureau director Robert Mueller told Congress yesterday.

Convicted Appraiser Nicolo Back In Custody
MPNnow.com - Rochester, NY
John Nicolo, who was convicted in a widespread kickback scheme involving Eastman Kodak Co. and a former Monroe County assessor, is back in police custody after he allegedly violated the conditions of his release.

Mortgage Crisis Leads To An Increase In Scams
WSBT-TV - South Bend, IN
When it comes to perpetrating a scam or a fraud some tools used are a gun, or a fist, or a knife,” Zultanski said. “Mortgage is another avenue to commit a fraud.”

Mortgage Firm Countrywide, In Response To Alleged Data Breach, Offers Free Credit Monitoring
Los Angeles Times - CA
Countrywide Financial Corp. is offering two years of free credit monitoring to customers whose sensitive personal information, including Social Security numbers, allegedly was stolen from the home lender's computer files.

Caught in ID Theft's 'Horrible Web'
Columbian - Clark County, Washington
A woman took Carpenter's professional identity as a real estate appraiser, using Carpenter's name and license number. She even appraised commercial and million-dollar properties that Carpenter, a residential appraiser, isn't licensed to do.

Top 10 Riskiest Areas for Mortgage Loans
U.S. News & World Report - Washington, DC
First American CoreLogic recently released a study that ranks America's top 10 riskiest areas in which to make a home loan.

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© Copyright 2004-2007 Rachel M. Dollar

Legal Disclaimer.
The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.

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