The real estate and mortgage industry is rife with fraud and other criminal activity, the growth of which is forcing lenders and agencies to take a more focused look at their documentation processes. As a highly unregulated industry, real estate organizations are struggling to plug numerous security holes without slowing the process. The trend toward of going paperless is beginning to gain traction with agencies and lenders alike, although printing and faxing physical documents remains the lifeblood of the industry – inviting any number of counterfeiters and other criminals to take advantage of a system worth millions of dollars and responsible for a big slice of the American economy.
Areas of Concern
Titles & Deeds
Title fraud is one of the most prevalent criminal activities in real estate, and one of the most rapidly growing white-collar crimes in the United States. Lenders can lose millions when titles are illegally forged without the knowledge of the municipal courts that issue and store the documents. Electronic techniques have been applied inconsistently at the courthouse level, but have not been effective in stemming the tide of counterfeit documents. Much of the problem lies with the municipal system itself, which does not use a standard title template nor adhere to the same level of security throughout its courts.
Appraisals
Changes in property appraisals can have a dramatic effect on mortgages and closing costs. At risk, besides hundreds of thousands of lender dollars, is the reputation of individual appraisal organizations. Like the courts, these companies lack a standard method to secure their documents, which can be among the most valuable in the entire mortgage process. If a property is over-appraised, lenders loan out more money, fertilizing a debt system that is already racked with defaults. This kind of mortgage fraud is not only dangerous to appraisers, but can cost the American economy millions annually through bankruptcies and forfeitures.
Closing Documents
Settlement statements, mortgage notes and other closing documents are edited and transmitted hundreds of times, but lack the basic security features that could protect their integrity. Such “generational” documents amass hundreds of changes and edits during finalization process. If names, numbers and other data do not match up between documents, this can put buyers, sellers, agencies and lenders at risk. Though electronic document storage, exchange and versioning technology has begun to be assimilated into the industry to keep records straight, the constant change of forms from print to fax to electronic continues to pose huge security problems.
Outlook
The real estate and mortgage industries are far from secure. Although the spread of electronic documentation will continue to transform both industries, a serious lack of protection that can be consistently applied and survive multiple changes of form is not being adequately addressed. To solve this epidemic of fraud, all members of the real estate value chain should adopt foundational print technology that can ensure the integrity of documents as they make the long trip to the closing table.
AuthentiGuard On-Demand Can Help
AuthentiGuard-On-Demand is a sophisticated print security technology that combines the benefits of copy and tamper protection with the ability to conceal sensitive data within printed documents. Utilizing standard desktop and commercial printers, the solution provides for the dynamic delivery of comprehensive protection to appraisals and other documents that impact the real estate sales and mortgage processes.