Magazine article American Banker

Mortgage Fraud Goes Goes Tech as Forgers Turn to Laser Printers

Magazine article American Banker

Mortgage Fraud Goes Goes Tech as Forgers Turn to Laser Printers

Article excerpt

Mortgage fraud had gone high tech.

Criminals no longer rely on the steady hand of forgers to fool banks into issuing mortgages, according to Dick Ward, president of Guarantee Asset Protection Services, Canoga Park, Calif.

Now they are using laser printers and computer programs available at neighborhood computer stores to produce forgeries that "look better that the real documents," he said.

|Very Prevalent'

And the average loss from such fraud runs to $35,000 according to Mr. Ward, whose company investigates mortgage fraud.

"It's very prevalent," said William Matthews, managing director at Mortgage Asset Research Institute Inc., an information-sharing company in Reston, Va.

At the Veterans Administration; about 20% of a random sample of defaulted loans "involve one sort of loan fraud or another," said Gerald Ferance, a loan specialist there.

Mr. Matthews pointed to the increased fragmentation of the mortgage industry. He said mortgage companies used to perform all facets of loans, but now appraisals and other services are contracted out.

"It's just more difficult to keep track of contractors than it is employees," he said.

Random Audits

And their scams are getting harder to detect. Income reports, pay stubs, and credit reports are forged, and tax software lets the user correct tax exhibits to conform with inflated incomes.

Every major federal agency involved in mortgages has a fraud investigation unit. Most do random audits of defaulted loans for fraud. …

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