In recognition of ACFE’s International Fraud Week, our Industry Undercover Cybertip of the Week focuses on how to root out a potentially fraudulent mortgage lender.

At the height of the housing crash and years to follow, the news was filled with horror stories about people trying to track down what company actually held their mortgage, banks overreporting stated income to bump up interest rates, and fraudulent “financial” companies scamming desperate homeowners facing foreclosure. Many lessons were learned, but that doesn’t mean fraudulent activities aren’t still occurring in the mortgage lending industry.

When applying for a mortgage, the buyer should make sure that the financial service provider is authorized to conduct business in the state. The National Mortgage Licensing System (NMLS) is the legal system of record for licensing money service companies, mortgage companies, mortgage loan originators, federally regulated institutions, or individuals licensed by state regulatory agencies that participate in NMLS.

The NMLS offers a Consumer Access database—a free service that verifies if a company or professional is authorized to conduct business in a state. The database is updated nightly during business days.

Let’s say I was interested in applying for a mortgage through Titan Mutual Lending, Inc. I need to know if the company is registered in my home state of New Jersey. I type the name and 36 search results pop up.

I click on the first one, “Titan Mutual Lending, Inc,” which takes me to the company’s data, informing me that the company formed in 2017 and is registered in 24 states. When I click on New Jersey, I learn that as of 3/16/2018 is holds a Residential Mortgage Lender License.

I also learn that, as of the day of my search, no disciplinary actions such as criminal, regulatory, or civil were taken against Titan Mutual Lending, Inc. If I want to proceed with applying for a mortgage from them, I’d be good to go.

If you have a consumer complaint, you can follow a link to report your complaint to the regulator. NMLS notes that the majority of actions taken against a registered licensee are from 2012 to the present. Complete regulatory actions information can be found by clicking on the regulator link.

It should also be noted that not all states are required to participate or list all license types. A list of participating states and types of organizations that participate in NMLS is included on their site.

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