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Adapting to Shifting Fraud Trends; Despite an increase in enforcement, fraudsters are always looking for and creating new angles to beat the system.

Article Excerpt
Byline: James Comtois

Committing fraud in the subprime market when the mortgage industry was flourishing (and due diligence and risk mitigation practices were lax) was relatively easy. Now with the mortgage, banking and credit industries in turmoil, it is inevitable that fraud will be on the rise. There are now more opportunities for fraudsters, who are becoming increasingly savvier, to commit schemes. Because of this, mortgage technology firms and brokers need to be as up to date on the fluctuating fraud environment as humanly possible.

According to Joe Williams, founder and CEO of ValuFinders, a Culver City, Calif.-based provider of real estate collateral risk management products, it isn't so much that there are new fraud schemes being discovered in the mortgage industry as that the old schemes are becoming more rampant or are shifting sectors.

"I'd like to say there are new trends, but there are very new tricks in the book," said Mr. Williams. "Fraud has been around for a long time."

The trend that Mr. Williams has seen grow in recent times is appraisal fraud. "I've seen a lot of inflated appraisals, and this is one of the common indicators of...

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