Magazine article American Banker

Fraud Prevention Data-Base Plan Advances

Magazine article American Banker

Fraud Prevention Data-Base Plan Advances

Article excerpt

A nationwide shared data base listing mortgage brokers, and others, who may have defrauded lenders cleared a major hurdle.

Fannie Mae, Freddie Mac, and other home-lending leaders that are backing the Mortgage Loss Prevention Forum approved several crucial details for the data base, said sources who attended a meeting last Friday.

"We are into something of a new era" in mortgage fraud prevention, one source said.

Besides the agencies and most of the top U.S. mortgage insurers, others backing the project are Countrywide Funding Corp., Pasadena, Calif.; Fleet Mortgage Group Inc., Columbia, S.C.; and PNC Mortgage Corp., Vernon Hills, Ill.

Most mortgage bankers are anxious to share information on loan brokers and others in the originations process who are suspected of fraud. They believe sharing information will help them catch more crooks and stem the billions in losses experts estimate the industry suffers each year.

It had been rumored that conflicting opinions would submarine the data base. But lenders agreed to remain committed to he project, sources say.

The group decided that the data base would operate as a for profit company similar to Dun & Bradstreet, sources say. Mortgage Asset Research Institute Inc., an information-sharing firm based in Reston, Va., will run the operation. The backers will be represented on the data base firm's board of directors.

The backers shunned a not-for-profit format originally discussed. Sources say a private corporation gives them more protection and "deeper pockets" in the event that anyone listed on the data base files a civil suit - a major fear among lenders. …

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