Diana Olick, financial correspondent of CNBC, recently took on the increasingly dangerous issue of mortgage fraud. Her more recent reports have illuminated this alarming trend. With mortgage fraud on the rise, lenders are looking to both new and established technologies to boost their fraud detection capabilities. This change in enforcement approach is a step in the right direction toward protecting the integrity of the mortgage lending process.
Even in her reporting, Olick completely ignores that mortgage fraud risks have skyrocketed the past few years. It’s easy to point the finger at COVID-19 for this increase, a perfect storm of a hot housing market and more remote, digital first transactions. Fraudsters are taking advantage of these circumstances to take advantage of weaknesses in the system. This lender greed has dire financial consequences for financial institutions and their borrowers.
In turn, lenders have pushed back by utilizing complex technologies that enhance their capacity to detect fraudulent activities. This is everything from artificial intelligence and machine learning algorithms that can process terabytes of data in seconds. These kinds of tools enable institutions to identify patterns of suspected fraud and take action before losses happen.
Olick’s perspective is a great reminder that we all need to stay on guard within the mortgage industry. Lenders are banking on technological advancements. They are proactively training their staff to identify potential red flags early on in the loan approval process. Through the synergy of technological innovation and human vigilance, these institutions seek to deploy a multi-faceted approach to guard against fraudulent activity.
Yet despite how recent some of these advancements may seem, their effects are already being felt throughout the industry. And lenders are experiencing improved rates of detection. This positive change insulates their bottom line and reinforces the broader recovery of our housing sector. There are many institutions that are just beginning to adopt these technologies. Consequently, the risk of mortgage fraud, aggregated across all industries, will likely decrease.
For those interested in following Olick’s coverage on this topic and other financial issues, her profile can be found on CNBC’s website at Diana Olick’s Profile. In her new role, she’s able to share that wisdom further as we all watch the capital markets and financial technology reshape our real estate lives.