Fraud and Prevention

Credit Information Firm Stepping Up Fight Against Fraud

By James Comtois
September 2, 2009

Keeping in step with the increase in mortgage fraud and the mortgage industry's reinvigorated campaign to combat it, a Salisbury, Md.-based provider of credit information services, reported an enormous leap in the use of its system of verifying tax returns.

Tax Return Verification reports compare income-related lines of a borrower's tax return with the same lines on file at the Internal Revenue Service and highlight any discrepancies. Credit Plus has seen a 628% increase in the use of its Tax Return Verification system, which mortgage professionals use to validate income and help detect and prevent fraud, over the past year.

Credit Plus president Steve Grant said in a statement that this staggering increase in tax return verifications is due in part to the mortgage industry taking fraud much more seriously in light of the recent credit crunch and decreased originations.

"In this state of the economy, with fewer loan originations, more people may be committing fraud out of desperation," he said. "Lenders are closely examining a borrower's total income and many are requiring that a Tax Return Verification report is submitted with applications."

According to the Mortgage Asset Research Institute, fraud committed on tax returns and financial statements increased from 17% in 2007 to 28% in 2008. The FBI labels mortgage fraud as one of the fastest growing white-collar crimes in the U.S. and reports that mortgage fraud Suspicious Activity Reports rose 36% to a total of 63,175 in 2008, and so far in 2009, there have been 33,291 mortgage SARs filed.

Credit Plus offers fully electronic order and delivery of any Tax Return Verification service. If the customer has already scanned or imaged the 4506-T, the IRS release form that is utilized to pull a taxpayer's tax return, he or she can upload the document to the order that he is placing online. The customer will then electronically receive the data back within 24 to 48 hours.

In addition, Credit Plus offers IDPlus reports that include a summary of fraud and active duty alerts or any other alerts noted on a file, whether a credit freeze has been placed on an account and Social Security number and address verifications.