Consumers "shopping" for a mortgage have taken on a new twist, leading to the creation of an information-sharing network by competing mortgage lenders.
In a desperate attempt to secure some forms of mortgage financing, loan applicants have turned to tailoring their loan application and loan documentation to that of what a mortgage lender is known by reputation for getting certain loan programs approved and closed. Think, "Telling them what they want to hear". This includes stating different sources of income and even alternative forms of credit, all in an effort to get the loan approved the way the applicant thinks the lender would like to see.
It is for these reasons competing mortgage lenders nationwide have created an information-sharing network to crosscheck loan applicants activity, such as income documentation and asset verification.
Using a mortgage loan applicants name and social security number, mortgage lenders nationwide have begun sharing pertinent applicant information as a way to safeguard mortgage lenders and investors from mortgage fraud. The information shared is based on specific information provided by the loan applicant, such as income and stated sources of income. This information is run through a database to see if this same loan applicant may have tried to apply for a mortgage loan with another mortgage lender, using different information. Loan applicants who provide conflicting information from one mortgage lender to another are not only immediately turned down for their loan request, are also subject to criminal charges of mortgage fraud, among others.
In addition to tracking consumer information, mortgage lenders are also tracking the names of mortgage brokers and loan originators who placed the loan with the mortgage lender, to see if potential fraud is being committed on the origination side and not the consumer.
In case you are wondering why a competitive group of mortgage lenders would band together in this effort, the answer is very simple. A majority of these lenders sell their loans their loans on the secondary market, and at some point in the future, could possibly sell their loans to each other. No mortgage lender wants to get stuck with a fraudulent loan, so a consensus of these mortgage lenders realized it was better to work together to combat mortgage fraud together.
Mortgage fraud is very serious crime, and is being taken seriously by mortgage lenders as well as law enforcement. The Federal Bureau of Investigation is current investigating thousands of cases of mortgage fraud, with consumers and so-called mortgage professionals being sentenced to lengthy prison terms and paying heavy fines as the direct result of committing mortgage fraud.
Think twice about the information you provide to a mortgage lender when applying for a mortgage loan. The assets and income you claim as well as the declarations you state on a mortgage loan application will be carefully scrutinized by mortgage loan underwriters, more so now than ever before. If you got away with mortgage fraud once, it is highly unlikely you'll succeed the next time around. And if you do succeed in committing mortgage fraud, just remember that months and even years later, you could get a knock on the door from someone with a badge in one hand, and handcuffs in the other.
For more information on how you can avoid mortgage fraud and predatory lending, please call 941-206-6000.
Mike Sikorski, MBA, GRI
Licensed Real Estate Broker
Licensed Mortgage Broker
Loss Mitigation Specialist
Florida Realty Network LLC
22079 Kimble Avenue
Port Charlotte, Fl. 33952
(941)206-6000
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