Software solutions provider MortgageFlex Systems Inc., Jacksonville, Fla., has entered into a partnership with Interthinx of Agoura Hills, Calif., in an effort to integrate within the same platform complementary tools that combine fraud prevention with predatory lending management.
Thanks to the partnership the Interthinx FraudGuard and PredProtect products are integrated into the MortgageFlex Residential Lending System opening up new opportunities for both MortgageFlex and Interthinx system users.
The integrated capability allows loan originators to perform fraud prevention and risk mitigation tests on loans before approval.
It also enables servicers to verify whether approved loans are in compliance with hundreds of federal and state anti predatory lending requirements, including the HOEPA Section 35 and Truth in Lending Act and Mortgage Disclosure Improvement Act tolerances.
According to Interthinx senior vice president, Mike Zwerner, the firm’s FraudGuard solution is designed to help increase loan processing efficiency, minimize costly errors and close loans faster. At the same time it provides secure data transmission for sensitive consumer information that ultimately helps minimize fraud-related losses.
In today’s market environment where as the crisis has enhanced fraud risk various government entities have responded with measures that aim to prevent or detect early fraud if and when possible, one of the biggest challenges for lenders and servicers is compliance.
Zwerner says the cooperation Interthinx’s PredProtect provides shared MortgageFlex-Interthinx clients the ability “to keep pace with the surge of new laws and increased enforcement by both regulators and investors.”
Craig Bechtle, the chief operating officer for MortgageFlex, whose platform allows users to periodically update their business processes so they stay in compliance with state and federal government regulatory requirements, says cost benefits add to the attraction sicne they represent a major advantage.
Delivering FraudGuard and PredProtect through the MortgageFlex Residential Lending System “requires no mapping, no programming and no additional integration costs” for users.
Interthinx is a charter participant in the national fraud prevention database MERS FraudAlert that provides fraud risk analysis with indices for the most common types of risk.
In addition to its quarterly Mortgage Fraud Risk Report the Verisk Analytics subsidiary offers risk mitigation solutions in collateral valuation, regulatory compliance, audit services and loss forecasting.
Interthinx executives say they have seen a growth in demand for fraud prevention tools.
Apparently along with mortgage loan originators who are making concentrated efforts to enhance fraud risk mitigation capabilities within their loan origination systems, mortgage servicers are more closely monitoring loan profiles in order to avoid fraud.
Bechtle told this publication that interest in tools like FraudGuard and PredProtect is increasing “as lenders get a better handle on the cost of quality” and understand that tools like this improve origination efficiency. Everyone’s “flight to quality” objective is achieved through good data and tools.
Fraud related losses remain an issue in 2011, he said, and that is why judging from interactions with platform users interest in such tools also is going up. If “the combination of a good LOS, a good network of third party providers and sound internal processes can achieve the same goal,” effective technology helps drive costs further down and balance unavoidable fraud losses.
