Countrywide Unit Sees Rise in Fraud

The subprime division of Countrywide Home Loans, Calabasas, Calif., is beginning to see an increase in mortgage fraud.Speaking on a panel at a subprime conference sponsored by the Mortgage Bankers Association of America, Countrywide senior vice president David Farrell said fraud appears to be on the rise again. "We had a rash of it last year," said Mr. Farrell, noting that instances of fraud come and go. Mr. Farrell voiced particular concern about income fraud, in which a consumer scans his/her pay stubs into a computer, creating new pay stubs that show a higher income amount. "Some of these things look great," he said, "but they're as phony as a $3 bill." He said in some cases loan brokers assist in the fraud. Countrywide, though, conducts job verification checks to root out pay stub fraud, he said. Mr. Farrell told MortgageWire that some scam artists even use Quicken tax software products to create new income tax returns. Countrywide can be found online at http://www.countrywide.com.