Watch out for these signs of fraud when processing mortgages
Losses from fraud, especially in large transactions like purchases and refinances, can be significant. Whether you’re a lender, mortgage broker or mortgage specialist, it pays to be vigilant and investigate further when you see signs of potential fraud.
Red flags to investigate
- Transfers of Title that are recent or immediately prior to the mortgage
- Equity gifts
- Power of attorney
- Investment properties
- Properties that are free and clear
- Length of established credit is not consistent with the applicant’s age
- Age and income of the borrower
- Significant variations in the handwriting of the borrower
- Employer’s address shown only as a post-office box or is difficult to verify
- Funds are being used to pay off a loan or other debt not associated with the transaction
Making sure you have a lender’s title insurance policy from FCT will give you peace of mind that your deal has been reviewed by our experienced underwriting experts who are skilled at detecting fraud. A lender’s title insurance policy from FCT also covers you against losses associated with title defects and the priority, validity and unenforceability of a residential mortgage.
Have any questions about our lender policies? Ask us in the comments!