imageRachel 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

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June 5, 2009 - Miami Herald
Feds Get Tough on Mortgage Fraud

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Loan Fraud Seen on the Rise

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Recent Posts

- Mortgage Fraud Scheme Leads to 83 Count Indictment
- Beazer Homes Settles Accusations of Mortgage and Accounting Fraud
- Closing Agent Indicted for Misappropriating Funds
- Falsified Loan Apps Lead to Criminal Charges
- 4 Indicted For Using Stolen Identities to Obtain Loans
- New Jersey Man Indicted for Mortgage Loan Misreps
- Florida Man Sentenced for Role in $30 Million Mortgage Fraud Scheme
- Ohio Man Charged in Straw Borrower Scam
- Loan Mod Company Ordered to Cease & Desist
- Former Mortgage Broker Pleads Guilty in $1.6 Million 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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mortgage fraud news



Today's News

Some Sources require Registration.

 

Erie Area Mortgage Broker Gets Prison in Fraud Case
GoErie.com - Erie, PA
Shortly before receiving a nearly three-year federal prison sentence, former mortgage office manager Francis R. Conti told the judge he never meant to defraud any of the homeowners caught up in a widespread local mortgage-fraud scheme.

Three Former Portland-Area Mortgage Brokers Face Fraud Charges
OregonLive.com - Portland, OR
Joel D. Surprenant, Michael Duc Han and Benjamin Lucian Lucescu all were charged with one count of obtaining mortgage loans through materially false and fraudulent pretenses.

Shaker Pair Pleads Guilty to Mortgage Fraud Charges
Cleveland.com - Cleveland, OH
Two Shaker Heights residents recently pleaded guilty to charges involving a mortgage scheme with seven area houses and $3 million in fraudulent loans.

Feds File Charges in Five Mortgage Fraud Cases
Chicago Breaking News - Tribune - Chicago, IL
Federal charges were filed today against 37 people and four companies in five separate mortgage fraud cases.

Feds Fighting Back
Contra Costa Times - Walnut Creek, CA
Mortgage fraud has increased so dramatically in the San Joaquin Valley that a task force of federal, state and local agencies has been formed to fight back.

Private Investigator Sees Rise in Mortgage Fraud Due to Economy
PR Web - Ferndale, WA
In the past 12 months his firm has been retained to conduct over 300 mortgage fraud investigations, a 100% increase from 2007.

Former UGA, NFL Football Player Arthur Marshall Charged With Mortgage Fraud Claims
WJBF-TV - Augusta, GA
He is also accused of defrauding three banks in obtaining loans for seven different properties in Columbia and Richmond Counties.

Cuomo Subpoenas Loan Modification Companies
New York Times - United States
“The entire industry is a scam, in my opinion,” Mr. Cuomo said Tuesday. “These are services that homeowners don’t need to pay for in the first place.”

Defendant Pleads Guilty to Wire Fraud Relating to Mortgage Fraud Scheme
Imperial Valley News - Holtville, CA
Scavitti admitted that between 2003 and August 2008 he unlawfully diverted mortgage funds that were wire transferred into his client office account to his own personal benefit, resulting in losses in excess of $2.5 million.

Fed Drug Report: Double Trouble for Metro Chicago
ABC7Chicago.com - IL
...Chicago street gang members run a network of legitimate businesses and have engineered mortgage fraud schemes, both to launder drug proceeds...

Previous Articles

TRIAL COVERAGE

Trial coverage provided by Anne Mitchell, Crazy Fish Realty.

Update - US v. F. Jeffrey Miller, et al.

Miller II: Judge Julie Robinson has ruled in favor of the defense motion granting a continuance for sentencing of the 3 convicted defendants: F. Jeffrey Miller, Steve Vanatta and Hallie Irvin. The three will now be sentenced after ruling on post trial motions set for August 10, 2009.

Vanatta has been in custody for over 2 years.  Vanetta filed a motion for his release pending sentencing. That motion was denied.

Miller remains free pending his sentencing. He has hired a new attorney who filed a motion to delay Miller's sentencing. In one post trial motion, the defense argues as to what assets are subject to seizure.

Defendant Todd Earnshaw is a Kansas City real estate Broker (and brother in law of Miller). Earnshaw has been indicted in what is commonly referred to as Miller I. A trial date for that matter has been set for January, 2010 in Topeka, Kansas.

The Government filed a motion to revoke Earnshaw's bond and remand him to custody while he awaits trial after learning that he allegedly committed the state crimes of Driving Under the Influence, Handicap Parking Violation and Failure to Control Speed to Avoid a Collision while on pretrial release. Notwithstanding finding that probable cause existed to believe that Earnshaw committed the aforementioned state crimes, Judge Robinson denied the motion, but ordered several strict conditions that Earnshaw must follow pending his trial.



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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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