Manual Mortgage Underwriting Leads to Less Fraud: QMS

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Mortgages that are manually underwritten by originators have less fraud than mortgages underwritten by a software program, according to data released by Quality Mortgage Services.

The Franklin, Tenn.-based firm audited 20,000 loans from 2009 and 2010 post-closing for quality control issues.

QMS found no fraudulent errors in loans that were manually underwritten, while loans underwritten by an automated underwriting system had a fraud rate of 2.09%. As the mortgage industry moves more predominantly into technology, QMS advises pushing for more loans to be subject to manual underwriting.

"Historically, the data produced for the audits performed in Quality Mortgage Services Mortgage Analyst Review Software shows that manually underwritten loans are the best deterrent against fraud for housing," the firm said.

Full Story >>>> HousingWire [March 19]