UGC and IMARC Offer Fraud Recovery
United Guaranty Corp. here has entered into an alliance with Investors Mortgage Asset Recovery Co. LLC, Newport Beach, Calif., to market its fraud-related loss recovery services.
According to Len Sweeney, senior vice president, strategic planning and corporate development at UGC, the mortgage insurer's role will be to help introduce IMARC's services to its lender customers. Otherwise the customer will work directly
UGC is a customer of IMARC, he noted, but this deal is not a result of UGC seeing an increase in fraudulent activities. But with the rise in interest rates, the market could see an increase in mortgage-related fraud.
IMARC offers two recovery options for lenders. Assignment services involve recovery of losses (both large and small) resulting from misrepresentation or fraud. The lender assigns the loss to IMARC, and IMARC pursues recovery in its own name. IMARC does not bill for its services, but retains a portion of what is collected.
Then there is what IMARC calls its "Gameplan" services. IMARC acts as a consultant to mortgage lenders where a large number of fraudulent loans are discovered, usually associated with flipping. IMARC provides the customer with a "litigation-ready" file, thus supporting the client's legal counsel in taking action. These services are offered nationwide.
By working with IMARC, Mr. Sweeney said, lenders are "outsourcing a specific expertise to the folks that have the knowledge and background to do it."
The president of IMARC, C. Robert Simpson, added that the mortgage industry has not been active in shifting the responsibility for the loss to those in the origination chain - whether it be the borrower, mortgage broker, originator or some other person - who has caused the loss. IMARC offers lenders that service.
He explained that because of the fraud a right to sue has been created, independent of the loan. That right to sue is an asset that can be assigned to a third party, such as IMARC.
"We stand in the shoes of our clients to pursue those, who for their own profits" have committed malfeasance, Mr. Simpson said.
A benefit of the run-up in home values in the last few years is that lenders and servicers have been able to mitigate many of the instances of fraud.
But the effects of fraud will become more apparent, he said, "if and when values of real estate peak" and stay static or start to decline.
Mr. Sweeney noted that this is the second strategic alliance that UG has entered into of this type. The other is with Unified Solution Group, a title, escrow and closing services company in Michigan.
"Our strategy is to investigate and align with services that are of growing importance to our customers," he said.
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