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Using Federal Tax IDs in Fighting Mortgage Fraud
Answer by Kristine Regele, CAMS, Sr. Compliance Analyst - ChoicePoint
Question: Can federal taxpayer identification numbers be used to fight mortgage fraud?
Answer: Since tax IDs can be used to help verify the identity of each party to a real estate transaction, they can be useful in your effort to combat fraud.
The growing amount of mortgage and realtor fraud is alarming. For example, according to the FBI's Financial Crimes Report to the Public, the number of mortgage-related Suspicious Activity Reports (SARs) that they received more than quadrupled between 2001 and 20041. However, due diligence measures, like identity verification (IDV), can help minimize this risk. IDV can help you feel more confident that you know the person or company with whom you are about to conduct business. The federal tax ID number is an important piece of information used in IDV.
A tax ID number can be described as the business-world analogy to a Social Security number. Tax ID numbers are issued by the Internal Revenue Service to businesses who are required to pay withholding tax on employees. In fact, they are frequently called Employer Identification Numbers or EINs. Because each number is unique to a business, it is often used to identify a business entity.
Mortgage lenders, investors and insurers often verify the tax ID as part of the due diligence conducted on new or existing business relationships, such as those with mortgage brokers, correspondent lenders, appraisers, warehouse lenders, etc. You can help assure that the persons or businesses with whom you are dealing are who they claim to be.
One way to perform a tax verification is to utilize a standardized system to give you the advantage of having readily assessable and regularly updated tax id verification information at your disposal. An inquiry typically provides a quick response. Having the ability to verify the tax ID should not slow the pace of your business, yet it can help close the door to the risk of being a victim of mortgage fraud.
Learn more about mortgage fraud or sign up for a FREE live demonstration of MARI Identity Verification. With MARI, you quickly and easily verify the identity of individuals and companies that are seeking to do business with you.
About MARI
MARI (Mortgage Asset Research Institute), a ChoicePoint® service, helps mortgage professionals and companies more efficiently and easily detect and monitor instances of mortgage fraud with parties they are conducting business with. MARI subscribers include secondary market agencies, national and regional lenders as well as mortgage insurers. More than 70 percent of top industry participants use MARI services to safeguard their assets and protect their reputations.
About ChoicePoint
ChoicePoint (NYSE: CPS) provides businesses, government agencies and non-profit organizations with technology, software, information and marketing services to help manage economic and physical risks as well as identify business opportunities. Consumers have free access to the reports we create at www.ChoiceTrust.com. Learn what we do to protect consumer privacy by visiting www.PrivacyatChoicePoint.com and, for more information on our company, go to www.ChoicePoint.com.
This document is not intended to constitute legal advice and should not be relied upon as such. The opinions herein are the opinions of the author and do not necessarily represent the opinions of ChoicePoint or any other entity referenced herein.
1 Federal Bureau of Investigation, Financial Crimes Report to the Public, May 2005, (Mar 17, 2008)
First published on BankersOnline.com 4/21/08
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