Effort to stem ‘piggyback’ loan fraud lags By Kenneth Harney Article Launched

WASHINGTON - So-called “piggyback” credit-score inflation schemes for mortgage applicants haven’t been reined in, despite industry pledges to do so at the end of summer. As a result, lenders continue to be misled into treating loan applicants with poor credit as prime-credit candidates - worsening already critical fraud and delinquency problems in the mortgage market.

Fair Isaac, developer of the FICO score widely used for home loan underwriting, confirmed that its “FICO ‘08″ scoring model is not yet available at any of the three national credit bureaus. The new model, announced with fanfare in June as an antidote to piggyback fraud, was to have been activated in September at one of the bureaus, Experian. But Experian says it has no firm timetable to make the model available.

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