Mortgage Loan Originators

The Industry Asks Itself Some Good...Tough Questions...

Posted on Thursday, March 25, 2010

Fraud in the mortgage originations world is what happens when opportunity and motivation intersect. It is far more productive to limit the opportunity to commit fraud than it is to address motivations

. Are we using compensation in the form of bonuses to motivate quality decisions?
• Have we taken steps to de-couple incentives from production quotas?
• Have we made training a priority?
• Are we satisfied with performing loans, regardless of how they were originated?
• Have we taken steps to insulate our quality efforts from profit pressure?

Here are some questions to consider as we craft strategies for the changing landscape:
• Do we deliver strong, repeated communication that fraud prevention is an accountability issue shared throughout the organization at every level? Does this message start at hire date and continue, affirmed with a signed acknowledgment?
• Do training efforts clearly illustrate that the organization has zero tolerance for fraud?
• Has the organization considered a team of risk-prevention specialists reporting outside the normal hierarchy? This can be outsourced or in-house, if properly insulated.
• Do we actively encourage and reward whistle-blowing and staff-level intelligence? Most inside frauds are uncovered in this manner.
• Do we conduct irregularly scheduled audits of processes and departments?
• Have we leveraged our technology appropriately to spot indicators of ongoing fraud in the workplace?
• Have we clearly corrected any misperceptions on the part of stakeholders, so they understand that lost productivity is far outstripped by the savings offered through robust detection and adequate training?

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