Diana Olick is a leading economic correspondent at CNBC. These days, she’s channeled her muckraking effort on the very serious jump in mortgage fraud spreading like wildfire across the industry. With new technologies, lenders are more prepared to identify fraudulent activity than ever before. Although the mortgage market is at greater risk than ever, it’s getting more and more difficult to detect such challenges though there have been great advancements at detection.
As one example, mortgage fraud/ fraud for housing has experienced a significant increase in recent years, sounding the alarm bells for stakeholders and regulators alike. With every shift in the housing market, new techniques are used by fraudsters,” Olick explains. These scam artists are getting smarter, using an array of deceptive tactics to trick lenders and get loans for which they don’t qualify.
In reaction to this increasing threat, lenders turned to new, more advanced technologies to help flag the fraudulent applicant. Better analytics and machine learning algorithms put the power in institutions’ hands to analyze these massive amounts of data. They are able to more quickly spot anomalies that may suggest fraudulent activity. Olick also points out how these tools speed up and streamline the detection process. They too greatly reduce risk for all stakeholders, lenders and consumers alike.
The need for vigilance in our nation’s mortgage lending sector is paramount. Adapting to fraud, as Olick notes, is about keeping one step ahead, changing accordingly, and spending money on the newest technologies and innovations. Lenders are now more aware than ever that a proactive approach is essential in safeguarding against potential losses associated with fraud.
Technology is a crucial weapon in the fight against mortgage fraud, Olick said. He’s just as firm that consumer education and awareness is equally important. By recognizing the red flags of possible fraud, borrowers can better shield themselves and help ensure the overall mortgage ecosystem is more robust.
Diana Olick’s CNBC Profile provides a wealth of information on her reporting and analysis related to finance and real estate.