Denver fraud case highlights need for risk management solutions

Thirty-two year old Jon Urbana was recently indicted by a Denver, Colorado grand jury for allegedly stealing tens of thousands of dollars from two loan officers. According to NBC News, Urbana presented the lenders with forged documents that led them to believe that he controlled an ownership interest in Van Schaack Holdings and VS Investors, and could use that interest as collateral for a short-term business loan for a laser hair-removal company, Light Away.

Urbana forged the signatures of relatives to legal documents, and as a result, is now charged with seven counts of forgery, two counts of theft and one count of fraud by check, according to the source.

Unfortunately, there are others who find more success in taking advantage of loan officers not as adept at identifying fraud. In fact, the annual mortgage fraud report performed by LexisNexis and published by The Wall Street Journal found that 74 percent of loans reported in 2013 involved some kind of fraud or misrepresentation on the loan application.

The fraud report argued that strict lending requirements have led to an increase in attempted loan fraud, as more find themselves unable to legally qualify. With the rapid change taking place in the industry and the current focus on streamlining the loan origination process, lenders need to take care to ensure they are managing fraud risk effectively.

Fraud protection software allows lenders to exercise greater confidence in their underwriting decisions, and should be a key element in any origination process. With the increasing number of fraud cases and the myriad new strategies fraudsters are employing to gain access to credit, institutions of all sizes need to ensure they are taking the proper precautions to protect both themselves and their borrowers.