In a revolutionary move, Directors Mortgage Loan Corp. has hired a private investigator to probe borrower and broker loan fraud full time.

By all accounts, Riverside. Calif.-based Directors is the first mortgage company to staff a private investigator on a full-time basis.

Ruth Dixon, a California private eye who had run her own firm, was hired by Directors in July. Cheryl Howe, Directors' vice president for quality assurance, said an in-house P.I. has cut costs and saved time in investigations.

Law Enforcement Found Lacking

But some quality-control executives say Directors' hiring highlights the ineptitude of law enforcement agencies to stop mortgage fraud.

Fraud controllers at mortgage companies were enthusiastic about Directors' move.

"I am impressed," said Rebbeca Walczak, a vice president at Prudential Home Mortgage Inc., Clayton, Mo., of the hiring. "I think it really indicates a change ... that we are going to go out and fight this."

But Dick Ward, president of Guarantee Asset Protection System, Canoga Park, Calif, maintains that Directors' new P.I. will have only a small pool of loans from which to detect patterns of fraud. He said Directors is doing itself "an injustice" by relying on Ms. Dixon alone.

Directors, which until recently employed Guarantee Asset, disagrees. Ms. Howe says that the "sharing" of information at private investigation firms on cases from other lenders is "not necessarily legal."

Data Base in Development

She also said data bases like the one being designed by Mortgage Loss Prevention Forum - a joint venture launched recently by several lenders, including Fannie Mae and Freddie Mac - will provide all the fraud information from other lenders needed for effective prosecution.

Ms. Dixon investigates and prepares 10 to 25 cases a week for Directors, according to Ms. Howe.

Some suggested Directors' move reflects the meager attention enforcement agencies like the Federal Bureau of Investigations now pay to mortgage fraud.

Kevin Hawkins, supervisory special agent in the FBI's economic crimes unit, admitted that limited manpower costs the Bureau some levels of effectiveness combating mortgage fraud. But Mr. Hawkins said companies that hire private investigators, bring cases of wrongdoing to the F.B.I.'s attention. That insures "the people can have their day in court," he said.

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