Home equity loan fraud prevention tool launched by First American

First American Data & Analytics has released FraudGuard Home Equity, a single-source tool for risk management designed and configured specifically to help these lenders streamline their use of third-party vendors.

As mortgage rates rise and property values remain at record levels, consumers that need cash are turning to home equity products as an alternative to refinancing. Home equity line of credit volume in the first quarter increased 27% on a year-over-year basis, according to Attom Data Solutions.

FraudGuard Home Equity identifies undisclosed borrower liabilities, validates their identity, detects occupancy discrepancies and checks all applicable loan participants (including borrowers and employers) against industry exclusionary lists. Data is available for all residential properties in the U.S.

In addition, it creates a valuation report including property type, listing status and homeowner and/or condo association data. FraudGuard can be used with both HELOCs and closed-end home equity loans.

The Consumer Financial Protection Bureau’s decade-old regulatory compliance policy holds mortgage lenders responsible for the acts of the vendors they use.

The First American home equity product is a customized version of the company’s FraudGuard offering, which leverages public, private and proprietary data sources to help lenders identify risk and assess overall loan quality for the first lien mortgage market. FraudGuard became part of First American Financial in the 2014 acquisition of Interthinx.

FraudGuard Home Equity integrates with all of the leading loan origination systems.

“Lenders can assess the risk on a potential home equity loan using one centralized tool that analyzes all appropriate risk categories,” Paul Harris, general manager, mortgage analytics for First American Data & Analytics, said in a press release.