AGOURA HILLS, CA, Mar 13 (MARKET WIRE) --
Interthinx(R), the leading provider of mortgage fraud detection products,
announced at the Mortgage Bankers Association's National Fraud Issues Conference
that company analysts have uncovered more than 42,000 mortgage applications,
totaling nearly $11 billion, containing significant misrepresentations of the
borrowers'income. These applications were all originated and submitted for
Interthinxreview in the last six months of 2007.
"For the first time, the industry is getting a real-time look at the scope
of
mortgage fraud, and these numbers are staggering," said Kevin Coop, president
of Interthinx. "Based on what we've seen over the past few years, these results
confirm what we've been saying all along: fraud is the rotten core of the
mortgage meltdown."
The loans were discovered when Interthinx analysts determined that its
FLEX(FraudNET Loan Exchange) program had generated 42,610 Income alerts. The
Income Alert warns clients that a borrower has submitted multiple applications
and
that the borrower's income as reported has jumped by at least 15 percent
within a prescribed period of time. The Income Alert signals that a borrower or
another party involved in the transaction has manipulated the reported income
to qualify for a loan that would not be made if the true income were
disclosed.
FLEX is a proprietary program that allows lenders to leverage data from
allother Interthinx clients to more accurately assess the consistency and
veracity of a given application -- something lenders cannot do for themselves.
"The industry has not recognized the pervasiveness of fraud in part
becauselenders have legal obligations to protect consumer data. So if 'ABC Bank'
discovers a fraudulent application, it can't tell 'XYZ Bank' to watch
out,"Coop said. "Through FLEX, Interthinx is able to compare data from all of
its
clients' applications and reveal the deceptions without compromising consumer
privacy.
Knowing the truth lets our clients prevent billions in losses. What is
really disturbing is that the $11 billion represents just one of the alerts
used in the six-month timeframe."
Interthinx analysts are currently evaluating data for FLEX Occupancy and
Straw Buyer alerts. The Occupancy Alert is triggered when a borrower submits
applications for multiple "owner-occupied" properties within a prescribed
period of time. Misrepresentation of occupancy causes lenders to inaccurately
assess the true level of risk and to incorrectly price the loan. The Straw
Buyer Alert is triggered when the same subject property appears on applications
from different borrowers within a prescribed period of time. The Straw Buyer
Alert is a signal that the property and the borrower may be involved in an
organized fraud for profit scheme. Loss severity is greatly increased in
organized schemes since they can involve hundreds of loans.
Interthinx intends to release the results of its additional analyses in
thenear future.
About Interthinx
Interthinx, Inc., an ISO business, is the nation's leading provider of
proven risk mitigation and regulatory compliance tools for the financial
services
industry. Used at every point in the mortgage lifecycle to prevent mortgage
fraud, compliance violations and to assess risk, Interthinx is relied upon
by more than 1,400 customers, including 15 of the top 20 mortgage lenders
and three of the top five largest financial institutions. With technology that
earned
Mortgage Technology Magazine's prestigious 10X Award as "a diagnostic and
corrective solution of the highest order," Interthinx expertise in predictive
analytics, data mining, and risk scoring sets the standard for the industry and
directly increases the value of client portfolios. For more information,
visit www.interthinx.com or call (800) 333-4510.
About ISO
A leading source of information about risk, ISO provides data, analytics,
and
decision-support services to professionals in many fields, including insurance,
finance, real estate, health services, government, human resources, and risk
management. Using advanced technologies to collect, analyze, develop, and
deliver
information, ISO helps customers evaluate and manage risk. The company draws
on vast expertise in actuarial science, insurance coverages, fire protection,
fraud prevention, catastrophe and weather risk, predictive modeling, data
management, economic forecasting, social and technological trends, and many
other
fields. To meet the needs of diverse clients, ISO employs an experienced staff
of business and technical specialists, analysts, and certified professionals.
In the United States and around the world, ISO helps customers protect people,
property,and financial assets. For more information, visit www.iso.com.
Media Contact:
Michael DiVirgilio
(213) 486-6560 x328
Copyright 2008, Market Wire, All rights reserved.
-0-
