Hello, LOs,
While I was reporting out a story about non-QM shops beefing up hiring, an executive in the non-QM space informed me that fraud is on the rise, particularly with applicants falsifying income.
"Most of the fraud we have seen is surrounding falsified documentation whether that's bank statements, corporation records, and/or CPA Letters," the source said.
John Lenovick, a regulatory compliance attorney at Canopy Financial Technology Partners, said that as the non-QM space continues to grow, it is likely that we will see more instances of application fraud.
The reason? Many lenders are still using "seasoned technology" that sometimes fails to detect fraud during the origination process, he said.
Lenovick also added that "as the credit box expands and access to credit is more prevalent, there's gonna be more volume and you know, people always forgo quality for quantity."
Meanwhile, according to one loan officer interviewed by HousingWire, as interest rates rise and business slows, he expects application fraud to increase across the board.
Tell me LOs, what are your thoughts? If you work in the non-QM space have you noticed a spike in falsified documentation from borrowers? Will interest rates increasing impact instances of fraud?
Email me anonymously at mvolkova@housingwire.com
Maria Volkova
Mortgage Reporter, HousingWire
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