At least 15 of the nation's largest residential lenders have formed a loosely knit network to help fight mortgage fraud.

Participants include Citicorp Mortgage Co., Stamford, Conn., and Prudential Home Mortgage Co., Clayton, Mo.

Fraud-detection executives say they "informally share information" about shady brokerage operations collected on computer data bases. "The best way to combat fraud is through networking," said Jeff Polkinghome, vice president of intermediary management at Citicorp Mortgage.

The information on the brokers, most of whom were never convicted of a crime, has been a controversial legal issue in mortgage-fraud detection. The Federal Home Loan Mortgage Corp. released an "exclusionary" list of troublesome lenders two years ago. But now it does not make the list public. Legal experts say there is a possibility that public release of such a list could result in lawsuits from the brokers mentioned.

The National Association of Mortgage Brokers says there are about 18,000 brokers. About 5% defraud lenders, said Cheryl Howe, vice president for quality assurance at Directors Mortgage Loan Corp., Riverside, Calif

Even that small percentage has a significant impact. One mortgage broker who until recently worked for a brokerage company in the Northeast said fraudulent brokering was "getting out of hand."

Lenders can lose hundreds of thousands of dollars on just one bad broker. "If a loan goes bad it can ruin a quarter or even a year," said Steve Weimer, executive vice president of compliance and control at Loan America Financial Corp., Miami Lakes, Fla.

Besides stepping up back-ground checks in the past few months, lenders are setting up their own internal data bases on troublesome brokers. Loan America, for example, teamed up with Engineer Business Systems to help create a system for correcting data on brokers. The system, called Aces, has been on the market for a year. It enables a lender to target loans from a specific broker for review. Loan America has more than 2,000 brokers on its data base.

Mortgage Asset Research Institute Inc. in Reston, Va., offers access to a data base of publicly available information on troublesome brokers. A subscription to the service costs $975.

Jim Croft, the institute's managing director, said the informal network of lenders is "just a symptom of the need" for a more formal data base to share nonpublic information on troublesome brokers.

Mortgage brokers are not necessarily against this lenders' network. Michael J. Hoogendyk, executive vice president of the national association, said lenders are exercising "good business sense" by checking brokers with others.

"I don't know that that is necessarily morally wrong," Mr Hoogendyk said. But he said that publicly releasing the information major mortgage companies are amassing on data bases only provides a "quick fix" to their mortgage-fraud problems.

He said mortgage brokers in turn need information on lenders who defraud.

"People think that it is always the broker," Mr. Hoogendyk said. "In many cases, it's also the lender."

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