We are all familiar with an interac money email transfer (you can now do it via text). You log into your bank account the amount you want to send and who you want to send it to. You must have an email address for the recipient and a password for them to receive the money.

What does e-transfer has to do with preventing mortgage fraud? Everything most mortgage fraud is perpetrated using fake job letters, fake bank statements and fake NOA’s among other things. Yesterday I got an email from a lender introducing a new program that will cut mortgage fraud by a very high percentage. Talking to another one they say are already testing it with some high-risk brokers with success. A high-risk broker is one they suspect are sending fake documents. This program eliminated for these lenders fake bank statements.

Just like the e-transfer, with this program your information is secure and should be accurate and reliable in detecting and eliminating mortgage fraud. Here is how it works, when your mortgage agent gets a commitment from a lender they will also be provided with a link. This link they will provide to the borrower to log on to the lenders site and then select their bank from the site the link leads them to. They will then login to their bank with their inline banking info which then creates a secure connection between the lender and their bank. The client then selects the range of bank statement required by the lender which is the securely transferred to the lending bank’s file for the client.

The lender I spoke to yesterday said that for now it’s only going out to selected files- when there is a very large income, but the agent can’t explain why the applicant has collections or miss mortgage payments or credit card and or loan payments – files that just don’t add up. Equifax is working on another project that they will roll out soon or probably already testing that will target job letters and pay stubs.

In the last month I have had three of those files that went to other agents because I wouldn’t do them as for one its unethical but mainly because it hurts the client even more than they think. You will notice that banks mostly want to offer a 25-yr. amortization mortgage. There is a reason for that. Mortgages that have a 25 yr. or less amortization are always insured. Borrowers move from bank to bank, and the bank have less chance of having a large database of every borrower but the insurers do and they match the information that borrowers give to each lender.

All the major players are now co operating to prevent mortgage fraud. In the last month I have had three people coming to me wanting a lower rate than they were promised and then not get because they had approval (one from one of the lenders I spoke about earlier). One paid his agent $4500.00 to produce some of the things above and ended up getting a first mortgage of 12%. I offered something that would save him over $18,000.00 a year but he was focused on how much he had paid the agent he wasn’t prepared to change.

Another woman said she paid an agent $10,000.00 but he couldn’t deliver and now he isn’t returning her calls and another won’t leave the people she is working with as they have taken so much money from her and have not been able to get a mortgage for six months and have changed her income with every lender they have been to.

The real cost of mortgage fraud are to the borrowers who think they go to an agent and order a rate which the agent know will not happen. They end up paying paying a lot of money to the agent who b virtue of collecting those monies is getting paid for a deed he or she will not perform. The borrower not knowing the ins and outs of the industry keep paying and paying for something they will never get. Those days are almost done.

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