Protecting a mortgage company from the various schemes can be a daunting task. With so many evolving illegal activities and the help of technology, fraud prevention is always a top priority for these firms. However, with a robust Mortgage Broker Professional Liability insurance policy and the right internal controls, your clients can significantly minimize these schemes.
Here are some best practices for your clients to follow to ensure fraud does not occur:
- Follow all state and federal regulations regarding licensing and loans.
- Create a system of internal controls to minimize fraudulent activities and implement a procedure to detect potential schemes.
- Only accept financial evidence and documents directly from the borrower.
- Appraisers should meet state requirements and have a proven record of success with previous clients.
- According to Freddie Mac, remember that you are accountable for the contents of a loan file, including:
- The sources of and authenticity of all qualifying documentation.
- Representations made on the loan application, such as occupancy, employment income, assets, equity contribution, etc.
- Ensure the representation of the transaction is accurate from start to finish.
- Verify authenticity of loan information, credit reports, appraisals, approvals, etc. Especially if this information is coming from a third party rather than the borrower, ensure they all documents accurate and authentic.
In addition to bringing you the latest news from the insurance industry, PL Risk provides Resources for Agents and Brokers nationwide. We’ve recently implemented Hiscox Now, which allows agents their own access to Hiscox and instant quoting. To learn more about our operations, contact us today at (855) 403-5982.
Share this post
