Written By: Glenn Michaels, Op-Ed Writer
Every day more of us are becoming victims of fraud and of Identity Theft. I was once a victim of Identity Theft, the person who did the crime in my case served two and a half years in prison. I know most people who do this crime I seldom caught.
Underwriters when reviewing a credit report pay extra attention if there is a “Fraud Alert” in a credit report. Underwriters must take extra precautions to verify the customer’s identity before granting credit in that customer’s name.
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Remember. Anyone can place a ninety (90) day initial fraud alert in their credit report, which can be renewed in ninety (90) day intervals indefinitely. Keep in mind that customers can get an extended fraud alert, which stays on their credit report for seven (7) years, if they provide a police report or other official records showing that they have been a the victim of identity theft. These customers will get two (2) free credit reports from each of the bureaus every twelve (12) months, in addition to the free copies everyone can get every twelve (12) months.
When reviewing the “fraud alert” check to see if the consumer placed a “credit freeze” in a consumer report. When borrowers freeze their credit records, it prevents lenders from seeing their credit report unless they specifically grant them access. This can prevent identity thieves from taking out new credit in their name, even if they have their Social Security number and other personal information. Current creditors are exempt from the freeze, and the borrowers would need to use their PIN to allow certain lenders or for a certain time period to view their report when they apply for credit.
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When reviewing a credit report look at the address discrepancies reported by the credit report agency or evident from other identifying documents submitted by the consumer or other related parties to the transaction. In case of multiple addresses reported on a credit report other than the subject property address in the last two (2) years, one should try and use the county’s departmental assessors, appraiser or tax collector website for verifying property owners. This will also be helpful in determining if the property is residential or commercial. A reverse mortgage borrower can own investment properties so check the utility bills. If there is a PO Box address, check to see if it is in the same city as the subject property.
If there is unusual credit activity, such as an increased number of accounts or inquiries see if they are in the recent past. If so, see whether they were in relation to the mortgage. Very often you the underwriter will need more clarification and a request should be made to the borrower for more information or explanation on this.
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Look more carefully at the identification documents. Make sure nothing appears altered or forged. Check the address on the driver’s license. Check the date of birth on the driver’s license against other documents in the file.
All documents that contain a borrower’s photograph should be examined for likeness. If any photograph looks significantly different it should be question.
This is why you should not ignore the “fraud alert” shown a credit report.
About The Author
Glenn Michaels - As an NAMP® Opinion Editorial Contributor, Glenn Michaels is a mortgage underwriting instructor for CampusUnderwriter (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years.
