Mortgage Fraud Proving Difficult to Eradicate

admin —  August 17, 2010 — 3 Comments

An article was recently released detailing the difficulties in eliminating Mortgage Fraud from the industry:

Communities that are currently struggling from the effects of fraudulent mortgage transactions may still be suffering years from now, according to research released by Interthinx. The quarterly Mortgage Fraud Risk Report notes that six of the ten riskiest MSAs (metropolitan statistical areas) in the nation were in the top ten a year ago, and all ten of the MSAs that were at the top of the list for fraud last year are still in the top 20 today.

The report analyzes national fraud risk and indices for the four most common types of mortgage fraud risk. Overall, analysts found that fraud risk increased by 12 percent, compared with the same period a year earlier. Currently, the national fraud risk index is 145 (n = 100).

Other findings in the quarterly report include:

  • Nevada replaces Arizona as the state with the highest fraud risk, though both states have indices about 40 points greater than that of third-place California. The high indices in Nevada and Arizona are due mostly to the disproportionately high refinance risk in those states.
  • ZIP-code-level analysis showed that the majority of the ten riskiest ZIP codes are, not surprisingly, located within MSAs that are in the “very risky” category. However, two of the three riskiest ZIP codes are located in Chicago, which at the MSA-level has an index less than the national value.
  • The identity fraud risk index had a quarter-on-quarter increase of 10 percent for the second consecutive quarter, the only type-specific fraud index to display a strong increasing trend over the last three quarters.
  • The occupancy fraud risk index decreased by 9 percent from the previous quarter. It fell 11 percent between the fourth quarter of 2009 and the first quarter of 2010.

The full report is available at The Mortgage Fraud Risk Report is an Interthinx information product that the company’s team of fraud experts created. The report was prepared with input from Constance Wilson, Ann Fulmer, Shane De Zilwa, and the Interthinx analytics team. This is the fifth time the company has released its quarterly report. The information is designed to provide deeper insight into current fraud trends through analysis of the extensive pool of data the company amasses from the industry’s use of the Interthinx FraudGUARD® loan-level fraud detection tool.

As a result of our commitment to high-quality fraud detection and risk mitigation analytics, we are able to provide our lender clients a deeper analysis of the data that we collect,” said Kevin Coop, president of Interthinx. “The data distributed through our most recent report is designed to help lenders identify and plan for trends that will affect their risk mitigation strategies – and help assure their success.”

For lenders, the report has become a must-read because of its analysis and its relevance to their businesses,” added Mike Zwerner, senior vice president for Interthinx. “The report also serves Interthinx as a road map for product innovation on behalf of lenders. We’re keeping a close eye on the identity fraud risk index, but more important, we’ve observed and responded to the disturbing trend of the valuation fraud index with development of such products as CVM®, ValueGUARDTM, and Interthinx Review Appraisal Services.”

For more information about the Interthinx Mortgage Fraud Risk Report, visit


About Interthinx

Interthinx, Inc., a Verisk Analytics subsidiary, is a leading national provider of comprehensive risk mitigation solutions in the areas of mortgage fraud, collateral valuation, regulatory compliance, audit services, and loss forecasting. The Interthinx quarterly Mortgage Fraud Risk Report is a standard for the financial services industry and includes analysis of national mortgage fraud risk with indices for the most common types of risk. At every point in the mortgage life cycle, the Interthinx suite of services can directly increase the value of client portfolios. Winner of Mortgage Technology magazine’s 10X Award, Interthinx is a charter participant in the national fraud prevention database MERS® FraudALERT, a powerful utility that allows members of the mortgage industry to share data while maintaining privacy in a secure environment. For more information, visit or call 1-800-333-4510.

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3 responses to Mortgage Fraud Proving Difficult to Eradicate

  1. InterThinx employed and continues to employ, Fraud Auditors, Analysts & Underwriters (collectively “Fraud Detection Employees”) throughout the U.S. The primary job responsibilities of Fraud Detection Employees are verifying the accuracy of mortgage loan docs, processing defaulted mortgages and auditing mortgage loans. Fraud detection employees do not regularly supervise the work of 2 or more employees, do not exercise discretion and independent judgment as to matters of significance or perform office work related to InterThinx general business operations or its customers and have no advanced knowledge in a field of science or learning which required specialized instruction that was required to perform the job. The fraud detection employees are NON-EXEMPT under the FLSA and the applicable California Minimum Wage Order (7 CCR 1103) as well as other states laws. They pay a salary and nondiscretionary bonuses which are based on a percentage of total revenue generated from reviewing loan files, of which is designed to never allow an employee to potentially earn a bonus. Defendant InterThinx continue to classify all Fraud Detection Employees as EXEMPT and thus not entitled to OT compensation. The average day an employee works is in the realm of 10+ hours and they do not pay the OT by illegally classifying all such employees as EXEMPT by which breaking the law. This class action lawsuit will hopefully uncover whatever other dirt that has yet to be discovered that this filthy and supposed’ “Fraud Risk Management Company,” is committing that we don’t know yet. How ironic a company that pretends to be Fraud Advisors are the ones committing the fraud themselves.

  2. I’m not sure they will ever be able to stop it. I was a mortgage broker and banker for over 20 years and when I talk to people today that are in the business they still are getting by with fraud. I think also fraud is pretty rampant in the short sale field. The only difference you’re trying to disqualify people for a loan it’s backwards.You’re trying to get them declined for a loan.

  3. All I can say is this is just getting ridiculous. How in the world are we supposed to get out of this fraud mess?

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