“Fannie and Freddie have an enormous benefit,” Seguin stated. “They take a look at the mortgage 4 months after it’s closed. It’s simple to see, ‘Hey, the mailing handle has modified,’ and pull studies and discover out that it’s been rented and listed for hire on NMLS. The lender doesn’t have that info up entrance, and will have finished the whole lot proper, and they’re nonetheless going to lose if the borrower is untruthful.”
Glad to see motion taken
Seguin stated that fraud sometimes happens one in every of two methods within the mortgage trade. It’s both fraud for revenue, normally pushed by industry insiders, or fraud for housing, when the borrower sometimes alters the numbers to verify they qualify.
“You have got fraud for revenue and fraud for housing, the place it’s in all probability the previous 80-20 rule,” he stated. “Nobody has an actual estimate, however fraud for housing might be 80% of the fraud, however solely 20% of the losses. The place the fraud for revenue is just 20% of the time, nevertheless it’s in all probability 80% of the losses. And that’s the place you begin seeing these tendencies that basically begin including as much as large greenback losses for the lender.”
That is the place using AI know-how may also help establish tendencies that might cease fraudulent transactions earlier than they’re accomplished, quite than months later.
Fannie Mae companions with Palantir to struggle mortgage fraud utilizing AI, beginning with multifamily loans. Invoice Pulte highlights the potential to scale back prices and threat, whereas Priscilla Almodovar emphasizes early fraud detection to guard future loans.https://t.co/dQxDhA5mUm
— Mortgage Skilled America Journal (@MPAMagazineUS) May 29, 2025
“It’s more durable for an originator to establish one mortgage at a time,” Seguin stated. “You want some software to come back in and say, ‘That mortgage officer had 20 loans within the final 12 months. They’re all self-employed debtors. All of them have used the identical CPA.’ What are the chances of catching that whenever you’ve had 10 completely different underwriters take a look at these loans?”
