October 19, 2021

Volume XI, Number 292

Advertisement
Advertisement

October 18, 2021

Subscribe to Latest Legal News and Analysis

Fraud Risks High for Multi-Unit Property Mortgages

A recent report, published by Interthinx, an anti-fraud vendor for the financial services industry, revealed that loans associated with multi-unit properties have a much higher fraud risk than loans associated with other property types. Mortgage fraud occurs when an individual makes a material misstatement, misrepresentation, or omission which is relied upon by an underwriter or lender to fund, purchase, or insure a loan.

According to Interthinx, the fraud risk for multi-unit properties is more than double the risk associated with single-family residences, condos, or planned unit developments. The report should prompt lenders to screen these kinds of mortgage loan applications with increased diligence.

Multi-unit property loans tend to carry with them a higher propensity for occupancy and employment/income fraud. To keep financial risks low, lenders and servicers must constantly be on the lookout for fraudulent applications. There are many technological tools on the market to detect fraud. The best line of defense, however, is often a strict lending policy and thorough screening of loan documentation.

© 2021 by McBrayer, McGinnis, Leslie & Kirkland, PLLC. All rights reserved.National Law Review, Volume IV, Number 86
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

Joshua J. Markham, Real estate attorney, McBrayer, Law firm
Member

Joshua J. Markham joined McBrayer, McGinnis, Leslie & Kirkland, PLLC as an Associate in 2002 after graduating from the Nova Southeastern University Shepard Broad Law Center in Fort Lauderdale, Florida. Mr. Markham practices in virtually every aspect of real estate law, including title examination, title insurance, clearing title issues, deeds, settlement statements, preparation of loan documentation, contract negotiation and preparation, lease negotiation and preparation, and any and all other needs related to residential and commercial real estate matters. He also focuses his practice...

859-231-8780, ext. 149
Advertisement
Advertisement
Advertisement