You’re Making a Difference Reducing Mortgage Fraud! Want to Know How?

So you may have noticed that we often blog on the topic of mortgage fraud. This is because we are firm believers that awareness is the first step towards prevention. Fraudsters are always trying to stay one step ahead and so doing your best to be well-tooled to spot possible fraud can help you protect yourself, your lenders and clients.

As recently as this past summer a major Canadian alternative mortgage lender admitted to having suspended 45 mortgage brokers after uncovering evidence that mortgage fraud was taking place. 

In this instance the mortgage fraud related to fake employment letters that overstated the borrower’s income being provided to obtain mortgage approvals. In this instance, through their own audit, the lender uncovered the fraud and dealt with it.

We often suggest education, discussion, collaboration, technology and tools as being the main areas that can really lead to an overall reduction of fraud in the mortgage industry. It seems that Genworth has produced some Canadian statistics that validate this assumption.

In the same article in the BNN that discussed the incident that occurred with the lending institution discussed earlier, Stuart Levings, CEO of Genworth MI Canada, Canada’s largest private insurer, seemed to indicate that fraud is on the decline in Canada.

The article begins “Mortgage fraud has been on the decline in Canada in recent years thanks to tougher regulations, better training and new technology, the head of Canada’s largest private mortgage insurance company said Wednesday.”

A brokerage, especially super brokerages with franchises and established brands, have to lead by example, and so if Genworth is seeing a decline in fraud overall, we hope that many are.

Super brokerages who mandate continuing education, even over and above what is required by FSCO, and also mandate the use of underwriting tools to ensure stronger underwriting, make a massive difference when it comes to combatting fraud.

Courses like the ones offered by CAAMP and IMBA show agents how they can identify fraud and tools like Purview enable them to validate the information in their applications so that if something fishy does come up, they are positioned to address it.

Continuing the above practices really help the industry as a whole because not only are you the agent or brokerage offering a better service and maximizing profitability, you are protecting your other partners who may become a party to the deal you originate with a fraudster.

This was a great article and we blogged about it because it is definitely worth a read and we are also interested in your thoughts… You can read the article here: http://www.bnn.ca/News/2015/8/5/Mortgage-fraud-on-the-decline-in-Canada-Genworth-CEO-says.aspx.

Want to know more about how Purview For Mortgage Brokers can help you combat mortgage fraud? Call us today at 1.855.787.8439.

HPI Monthly Report - Home Prices UP 0.1% in October

In October the Teranet–National Bank National Composite House Price Index™ was up 0.1% from the previous month, a 10th consecutive monthly increase. This rise was about average for a month of October. Prices were up on the month in only five of the 11 metropolitan markets surveyed – 1.9% in Winnipeg, 0.6% in Vancouver, 0.3% in Toronto and Victoria and 0.2% in Edmonton. For Vancouver it was the 10th consecutive month in which prices did not fall, for Toronto the eighth – a trend consistent with the seller’s-market conditions prevailing in those two markets, as measured by the ratios of listings to sales calculated from the data reported by the Calgary and Toronto real estate boards. Elsewhere prices fell – by 0.2% in Quebec City, 0.3% in Montreal and Hamilton, 0.6% in Ottawa-Gatineau, 0.8% in Calgary and 1.7% in Halifax. For Quebec City it was the fifth consecutive monthly decline, for Montreal the third (the fourth for the Montreal condo market). The October rise in Edmonton ended a run of four straight months with no increase. The decline in Hamilton ended a run of five straight rises.

Teranet – National Bank National Composite House Price Index™

In October the composite index was up 5.6% from a year earlier, the same 12-month rise as in September and the strongest since May 2012. In Vancouver (+9.8%) and in Toronto and Hamilton (+9.3%), the 12-month gain was well above the countrywide average. In Victoria (+6.4%) it was closer to the average. Prices were up only 1.4% from a year earlier in Edmonton and were flat in Winnipeg and Ottawa-Gatineau. Prices were down from 12 months earlier in Montreal (−0.6%), in Calgary (-1.0%), in Halifax (-1.1%) and in Quebec City (−3.2%). It was the first month since October 2009 that prices were up from a year earlier in only five of the 11 metropolitan markets surveyed.

Mortgage Underwriting Tips - 5 Steps to Ramp up Your Closing Rates

Some brokers see lead gen and sales as the thing that can make or break their business. While it is true that without customers you have no business, the real aspect of your job that can make or break your success is in fact mortgage underwriting.

Not only does poor underwriting lead to more time and resources wasted on bad deals but it also leads to low closure rates which can damage relationships with larger institutional lenders like banks.

FIs monitor closure rates closely because the operational cost of their massive underwriting department working on deals that don’t close is incredibly high. FIs have even taken great measures in implementing tools and technology to verify even more information at the application stage for this reason.

Ramping up your closure rates make you more efficient, productive, and profitable, able to offer a better service and this all leads to stronger relationships. Improving closure rates means enhancing your underwriting process to ensure that more questions and verifications occur at the application stage.

Improving closure rates means looking at the common reasons deals fail and knowing how to verify the information points to identify issues with deals before you submit them.

Does this mean that every time something comes up your deal is over? No. What it does mean is that if something does come up you can ask your client about it and be better positioned to gather more documents and to be able to fight for the deals worth fighting for.

Submitting a deal where the lender uncovers things that you didn’t tell them because you didn’t know (or did) is entirely different from submitting an application with an explanation and supporting documents with respect to issues that you have uncovered and disclosed with the application.

Some examples:

1.      Other people coming up on title – verifying who the legal homeowner is on refi’s especially will eliminate this issue.

2.      Undisclosed mortgages – verifying registered encumbrances on title.

3.      Misstated mortgage balances – if the mortgage balance registered is twice as high as what the client said, and it was registered last year, this is an opportunity to find out from your client why they think their home is worth so much more.

4.      Discrepancies in property description – sometimes people misstate the size, numbers of rooms and condition (e.g. finished basement) and other features of the property. Checking into this first stops appraisal or AVM surprises if your bank like many other banks is using AVMs

5.      Discrepancies in sales history – a property that has changed hands too many times in a short period of time could present an issue.

6.      Discrepancies in value – people often don’t know what their home is actually worth.

These steps are important not because your clients are devious or want to get one over on you. These steps are important because many clients don’t even know what their home is worth or what they owe on their mortgage. The great thing about verifying this information first is that it could go the other way too.

Perhaps you realize there is way more equity or the client owes less on their mortgage. Now you can upsell the client and possibly submit an even bigger deal that makes even more sense for the client and lender.

We hope that this blog has been helpful to give you basic know-how and ideas of what kind of information you can look into to ramp up your closing rates.

Purview For Mortgage Brokers has the tools that make verifying information easy. Strengthen your closure rates and your relationships - call us today at 1.855.787.8439.

Training Time: Performing a Property Search and the AVM Component the PFMB Report

When you perform a property search inside Purview for Mortgage Brokers and generate your Property Report, one very useful aspect of the report is the Automated Valuation Model (AVM).

This is where Purview generates a value estimate based on data stored in the Ontario Government’s land registry database – comparing sales and generating an estimate in seconds.

In this issue of training time we are including a short video that shows you how to identify and review the AVM section of your property report.

Purview For Mortgage Brokers has the tools that make researching a property easy and effective. Not using Purview For Mortgage Brokers Yet? Contact us today at 1.855.787.8439.