The purpose of the MISMO Fraud Detection Workgroup is to develop, promote, and maintain voluntary electronic commerce standards for the exchange of Fraud Detection information for the mortgage industry.

The High Level Goal

The goal is to provide the mortgage industry an electronic framework for communicating fraud detection information during the pre and post funding mortgage process in a software friendly format (XML) as opposed to other traditional mechanisms.>

The Business Case

Suspicious Activity Reports (SARs) relating to mortgage fraud received by the Financial Crimes Enforcement Network (FinCEN) increased 62% between 2005 and 2006, and increased 108% between 2004 and 2006. Financial losses due to fraud, reported to FinCEN, tripled between 2003 and 2005.

As illustrated by the above statistics, mortgage fraud is on the rise and felt by all participants in the mortgage lending process. By providing a vehicle for standardized data transmission; we hope to create more efficient communications between mortgage industry participants in the pre and post funding mortgage process. The MISMO Fraud Detection Workgroup will provide the framework for the development of fraud-related XML data standards for the mortgage finance industry, adhering to MISMO structure, guidelines and governance.

How to Participate

The Fraud Detection Workgroup meets face-to-face at MISMO Trimester Workgroup meetings and schedules additional conference calls as needed. You can also join the Fraud Detection Workgroup listserv to participate in the internal workgroup discussions.

To sign up for the Fraud Detection listserv visit the Listserv Sign Up page.

Who Should Participate in the Fraud Detection Workgroup?

• Lenders
• Mortgage related service providers
• GSEs
• Law enforcements agencies
• Affiliated industry participants (i.e. title and mortgage insurers)

Scope of Work

Mortgage fraud has become a critical issue in the real estate finance industry, reaching epidemic levels according to the FBI. The types of fraud have branched out to touch many aspects of the mortgage loan transaction, including collateral based fraud, identity theft, loan-level transactional fraud, borrower fraud and applicant fraud.

The workgroup will work in accordance with MISMO Governance, Architecture, Core Data, and Core Structure Work Group’s recommendations for the creation of XML data standards.

Specifications Currently Under Development

Fraud Detection Request and Response Version 2.4

FAQ

Please visit the Fraud Detection FAQ page for additional information.