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Prudent Underwriting Standards are ‘Key’ to Avoiding Loan Fraud, Say Consultants
By Renee Dudley
print"It"s not news that borrowers lie," according to Ann Graham, a banking law professor at Texas Tech University. But banks, eager to reap financial rewards in the mortgage market, have made perpetrating fraud unnecessarily easy, she said. While easy profits have been replaced by a surge in mortgage fraud investigations, the number of suspicious activity reports (SARs) filed by financial institutions has increased to 53,000 last year, up from 37,000 in 2006, according to the U.S. Treasury Department's Financial Crimes Enforcement Network. For banks, the long drawn-out fallout of the real estate boom will mean a rethink of the practices...
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