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Using Lender Data to Pursue Legal Remedies for Fraud

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Using Lender Data to Pursue Legal Remedies for Fraud

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    1. Using Lender Data to Pursue Legal Remedies for Fraud

    2. Lenders are “Sharing” Huge Fraud Losses but not Data Common Fraud Schemes, Actors & Basis for Recourse Legal Pursuit is Required as Part of Loss Mitigation Fraud Identification, Analysis and Pursuit --Program Template Using Fraud Data to Prevent New Losses The Future: Sharing Data to Fight Fraud

    3. Lenders are “Sharing” Huge Fraud Losses but not Data

    4. Variety of Fraud Schemes are Proliferating Common Fraud Schemes “Bad Actors”

    5. Legal Pursuit and Recovery is a Vital Component of a Robust Anti-Fraud Program Fraud Losses Destroy both Lender and Investor Returns Fraud destroys bond and portfolio ROIs Secondary Market Performance Models can account for statistical losses, but not for fraud Lenders and Servicers have historically not pursued fraud recovery beyond the originator Servicers Have a Contractual Duty to Pursue Fraud Recovery Servicers are pre-occupied with more politically pressing loss mitigation efforts like loan modifications Lenders and servicers owe fiduciary duties to Investors to provide loss mitigation programs The “Servicing Standard” now includes aggressive action to recoup fraud losses

    6. Credible Fraud Recovery Requires a Thorough, Proven Process

    7. Fraud Detection Tools Maximize Recovery Pool

    8. Use Forensic Audits to Confirm “Collectible Fraud”

    9. Use Qualified Counsel to Pursue and Litigate Claims

    10. “Those Who Ignore History are Condemned to Repeat it” 2004-2005… Hawthorne, CA Home Civil Fraud Judgment: LA County Superior Ct, 2005 Title Agent forged signature on Deed and recorded it to convey title to new owner New Owner Borrowed: $470,000 Prior Lien Payoff: $203,000 Net Fraud Proceeds/ $267,000 Bank Losses 2007-2008 Rancho Cucamonga, CA Home #1 Rancho Cucamonga, CA Home #2 Criminal Conviction : US Attorney, Central Dist CA Straw Buyers found to purchase properties using fraudulent title/escrow company Straw Buyer Borrowed: $4,000,000 Prior Lien Payoff: $2,000,000 Net Fraud Proceeds/ $2,000,000 Bank Losses

    11. Using Fraud Data to Prevent New Losses Lexis-Nexis/Choice Point Fraud Guard (SS#, Employment History, Address History Credit Report Fraud Alerts – contact borrower directly to confirm identity and legitimacy of proposed transaction Internet Social Security Verification State, County & City Licensing Verification Tax Preparer Authentication Reverse Phone Number & Address Lookups (free sites) People/Business Searches (zabasearch.com – free & fee sites) Salary Approximation on Stated Income (salary.com – free site) Utilize 4506-T with the IRS to validate Tax Returns & Filing Status (stated income loans) Property searches & aerial photos (Sitex.com AVM’s – fee; RealQuest.com – fee; Zillow.com – free; Realtor.com – free; Googleearth.com – free & fee) County Assessor Data

    12. The Future: Shared Lender Database

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