Countrywide Affiliate Acquires Vendor Of Data Base Service Meant to

A large mortgage conduit has bought a fraud detection company and will offer its services to clients.

The buyer is Independent Mortgage Corp., a unit of CWM Mortgage Holdings Inc., Pasadena, Calif. Independent Mortgage issues securities backed by loans originated by other lenders.

Fears of mortgage fraud have been growing in the industry as many lenders reduce their standards or otherwise cut corners in processing mortgage applications because of severe competition with mortgage volume relatively slack.

CWM's new unit is Guaranty Asset Protection Services, West Hills, Calif., which has a data base that helps spot phony entries on loan documentation.

"It runs loan applications against information known to be fraudulent," such as Social Security numbers that belong to dead people, "and kicks them out," said Ann McCallion, vice president of Countrywide Credit Industries, which manages CWM, a publicly traded real estate investment trust.

The data base also includes lists of unlicensed real estate agents and those that have been disciplined, names of dead people, fraud-linked post office boxes, and other pulic information that might turn up on a doctored loan application.

The unit also offers fraud prevention services such as loss mitigation investigation and training of underwriters.

It will continue to serve its 140 existing clients, including mortgage lenders, investors, and mortgage insurance companies.

CWM's other units include Construction Lending Corporation of America, which includes consumer and builder divisions; Independent National Finance Corp., which makes subprime loans; and Warehouse Lending Corporation of America, which finances lenders' mortgage inventories.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER