LexisNexis® RiskWise® Helps Mortgage Lenders Reduce Application Fraud and Identity Theft

DAYTON, OH – Mortgage industry analysts have estimated that more than 10 percent of home loans have an element of misrepresentation, and law enforcement agencies note that mortgage fraud continues to grow. To help the mortgage industry, LexisNexis® offers RiskWise® screening solutions that lenders and brokers can use as part of their efforts to verify the applicant’s identity. The solutions include an SSN verification and help to combat identity fraud, reduce application misrepresentation, detect property flipping and better segment loan applications to help increase pull-through rates, decrease delinquency and decrease repurchase and origination costs.

“LexisNexis mortgage screening tools give lenders the power to verify the information that applicants provide,” said Jim Peck, LexisNexis Sr. Vice President and Chief Operating Officer, Risk Management. “Authenticating the identity of a loan applicant is the first and most crucial step for mortgage lenders. Our products verify identity and offer a risk indicator to demonstrate the risk of conducting business with that applicant. The mortgage lender can use our risk indicators to develop policies to better analyze and segment loan applications.”

According to recent news stories, the FBI has received almost three times as many reports of suspicious mortgage activity this year as compared to 2001. Through the first nine months of 2004, mortgage companies and banks have reported more than 12,100 instances of suspicious activity compared with only 4,220 in 2001. The Associated Press reported that the FBI’s stepped-up efforts to crack down on mortgage fraud “has resulted in more than 151 charges since August in cases with potential losses to banks and other businesses of an estimated $3 billion.”

According to law enforcement officials, one of the key reasons for the increased fraud is the lending and refinancing boom driven by the cheap credit available in the last few years. The Commerce Department reported that sales of new homes rose by 9.4 percent in August, the largest increase since December 2000.

LexisNexis RiskWise mortgage screening tools are developed utilizing LexisNexis years of experience in offering fraud prevention services to banks and other financial institutions.

LexisNexis RiskWise works by searching multiple databases to verify and validate the authenticity of an applicant’s identity and to provide a risk assessment indicator that has proven to reduce false positives. Additional data can be returned to assist with exception processing and re-verifications. RiskWise is designed to work at various stages in the mortgage cycle particularly at originations and pre/post funding and is available via Web- based searches, batch-processing or through systems integration in existing platforms.

LexisNexis RiskWise® InstantID®, endorsed by the American Bankers Association (ABA), helps financial institutions verify identity, predict and detect fraud, and is a part of a compliance program for Section 326 of the PATRIOT Act.

About LexisNexis®
In the U.S., LexisNexis (www.lexisnexis.com) offers an extensive range of products and customized tools that address job-specific and organization-wide information needs, driving productivity and confident decision-making. For 30 years, LexisNexis has been an information solution provider. Through its risk management flagship products, RiskWise®, PeopleWise®, Banko®, and Accurint®, LexisNexis products help to authenticate identity, locate people and assets, enable commerce, conduct background screening, and support national security initiatives. Customers include government agencies, top law firms, and major companies in the fields of national security, financial services, collection and recovery, insurance, mortgage, telecommunications, e-commerce and retail. For more information, contact http://www.lexisnexis.com/riskmanagement/