Trendwatch: Fraud big story in 2006
Call it a reporter's hunch, but you're going to be hearing a lot about mortgage fraud next year, and not just because the companies that exist to fight the problem are so good at hounding the press for coverage. You may have read the story in the National Mortgage News Daily Briefing today:
Here's why I think this is a trend poised to be huge in 2006. The Fed is expected to continue raising interest rates, which will affect mortgage rates, which will finally kill off the refinance business. Most lenders are betting on home equity to shore up falling volumes, but no one really believes it will come close to keeping companies earning anything close to what they have been over the past few years. Meanwhile, criminals still love earning a dishonest buck.
Not coming crystal clear yet? I grew up in the midwest. I'll spare you the "How Tough I Had It" story (as I'm saving that for my grandchildren), but suffice it to say I saw plenty of folks sending in their hard-earned money for the latest information on how to really make it rich. It was almost always the folks that really needed to hold onto their money that sent if off in the mail.
The greater the desire, the easier the mark for the confidence man.
There are going to be a lot of folks in the lending industry next year trying very hard to stay in it. Without iron-clad fraud mitigation strategies in place, many will fall prey to fraudsters in 2006. Statistics indicate that most mortgage fraud involves an insider. We have the technology today to stop most of these criminals in their tracks. The tough job is making sure that people actually use the fraud prevention tools we already have. Companies that can do that will be the ones that profit in 2006.
"...the government said the number of pending [mortgage fraud] cases rose 35% in fiscal 2005, to 721. According to figures released by the Federal Bureau of Investigation on Dec. 14, fraud-related losses totaled $1.01 billion in 2005, more than doubling from the year before. "
Here's why I think this is a trend poised to be huge in 2006. The Fed is expected to continue raising interest rates, which will affect mortgage rates, which will finally kill off the refinance business. Most lenders are betting on home equity to shore up falling volumes, but no one really believes it will come close to keeping companies earning anything close to what they have been over the past few years. Meanwhile, criminals still love earning a dishonest buck.
Not coming crystal clear yet? I grew up in the midwest. I'll spare you the "How Tough I Had It" story (as I'm saving that for my grandchildren), but suffice it to say I saw plenty of folks sending in their hard-earned money for the latest information on how to really make it rich. It was almost always the folks that really needed to hold onto their money that sent if off in the mail.
The greater the desire, the easier the mark for the confidence man.
There are going to be a lot of folks in the lending industry next year trying very hard to stay in it. Without iron-clad fraud mitigation strategies in place, many will fall prey to fraudsters in 2006. Statistics indicate that most mortgage fraud involves an insider. We have the technology today to stop most of these criminals in their tracks. The tough job is making sure that people actually use the fraud prevention tools we already have. Companies that can do that will be the ones that profit in 2006.
