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Mortgage lenders continue to see rising risk in applications

Potential fraud from applicant-provided information costs lenders $1 billion annually

LOVELAND, Colo.--(BUSINESS WIRE)-- Kroll Factual Data, Inc. (“Kroll Factual Data”), a leading provider of independent verification services to mortgage lenders, banks, credit unions and property management firms, announced today that loan files processed by the company containing the possibility of fraudulent activity increased 1.3 percent in the second quarter of 2012 compared to the first quarter. According to the Mortgage Bankers Association, applicant fraud costs lenders and financial institutions a billion dollars annually.

“With rates at all-time lows, the volume of loan applications in the second quarter was extremely high, putting even greater pressure on mortgage lenders,” said Rod Bazzani, President, Kroll Factual Data. “With our risk analysis and verification engines, we have the ability to spot potential fraudulent activity based on alerts triggered by the applicant-provided information and then provide those alerts along with recommended remediation actions to our clients, helping them mitigate risk and operate more efficiently.”

At the time of Kroll Factual Data’s founding in 1985, mortgage rates had just begun receding from all-time highs triggering a deluge of refinancing. Today, with 2012’s all-time low rates, the deluge has turned into a tsunami of mortgage application volume but with much more stringent lending requirements. To help lenders successfully navigate this sea of applications, Kroll Factual Data has developed and continues to refine advanced proprietary algorithms—deployed through its fully customizable risk analysis and verification engines—that assess applicant-provided information for the indicators of potential fraud.

These indicators fall into several broad categories, the most common being possible occupancy/straw buyer misrepresentation; identity misrepresentation; Social Security number discrepancies; and personal information discrepancies, including name, age/date of birth and contact information.

“Mortgage fraud hurts not only lenders and financial institutions, but also legitimate homebuyers and other property investors—not to mention their communities,” says Mr. Bazzani. “By continually refining our products and services, Kroll Factual Data enables clients to be more efficient and targeted in how they handle risk. By employing a more-nuanced assessment of risk, they are in a better position to help applicants potentially get the homes and properties they desire, generating stability and tax revenues for communities across the country.”

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About Kroll Factual Data

Kroll Factual Data, Inc. is a provider of independent verification services to mortgage lenders and investors, banks, credit unions, insurers, property management firms, regulatory and government agencies and other businesses. For more than 25 years, Kroll Factual Data has helped clients confidently make timely, accurate decisions that mitigate risk, enhance safety and soundness, and increase profitability. By aggregating and analyzing information, Kroll Factual Data helps its customers protect financial assets and comply with regulations. For more information, visit

Kroll Factual Data, Inc.
Chris Horn, 800-929-3400 x7017

Source: Kroll Factual Data, Inc.