Social Security Numbers and Mortgage Fraud

The social security card looks like an innocent little thing. However, its 9 digit number packs a powerful wallop during the mortgage process.  People who commit mortgage fraud often attempt to utilize other people’s socials to acquire mortgage loans.

According to Fannie Mae’s Fraud Finding Statistics , for the 2011 and 2012 mortgages where misrepresentations were discovered,   8% of the misrepresentations involved social security numbers. This, unfortunately, is an increase from 2010.

Mortgage fraud is a rampant practice in today’s real estate climate, with fake or stolen social security numbers often at the heart of the scams. Fraudsters have several ways of gaining access to a person’s social:

1: Purse or wallet snatching: a thief may utilize this very common practice to gain access to a consumer’s private information.

2: Phone scams: fraudsters call a person with a phony story. Examples of this are scammers telling the person he/she has won a great amount of money, or posing as the person’s bank or credit card companies. In these cases, thieves ask for identity verification in the form of a social security number.

3: Computer hacking: websites where private information is stored may be hacked in order to retrieve social security numbers.

Once fraudsters have secured a valid social security number, they can utilize it to open credit cards, get hired for jobs, AND obtain a mortgage.

Criminals who set their sites on mortgage fraud often set up complex networks and intricate scams to commit mortgage fraud. One person will steal the social security number, while another fraudulent person applies for the mortgage. A group working this way can rack up tens of thousands of dollars in cash without the consumer’s knowledge.

How can consumers protect themselves?

–          Leave it at home. Never carry your social security card in a purse or wallet. This practice will eliminate the possibility of a thief stealing it in a purse or wallet snatching incident.

–          Guard the number closely. Only give out the number on a call that you initiated.  Beware of anyone calling or emailing you asking for your social security number.

–          Report a theft immediately.  If you feel your social security number has been compromised, report it to the FTC, the 3 credit bureaus, and the Social Security Administration immediately. Doing damage control up front will save you big headaches down the road.

How can mortgage lenders protect themselves?

–          Closely check the credit report. Scour it thoroughly for any discrepancies in the applicant’s social security number.

–          Run a social security verification on every borrower. For added protection, this process makes certain the social matches the person trying to obtain the mortgage.

It’s a sad fact of life there are criminals out there who prey on honest people by fraudulently acquiring their social security number. However, by being vigilant (whether you are a consumer or a mortgage lender), these criminals can be thwarted and the incidences of mortgage fraud can be decreased.

~~Susan McCullah is the Product Development Director for Data Facts, a 23 year old Memphis-based company.  Data Facts provides mortgage product and banking solutions to lenders nationwide. Check our our website for a complete explanation of our services.