Battling fraud one loan at a time

What is the number one way to uncover mortgage loan fraud?

Paul Sullivan, director of mortgage fraud operations in Fort Washington, knows the
answer to this question first hand and is on a mission to stop fraud altogether. In June and
July, he takes his training class on the road to keep loan quality high and reduce any risk
to the company.

“Mortgage fraud is at an all-time high, and tips from company employees is the top way
to uncover a problem,” he says. “Therefore, the key to successful risk management and
fraud prevention is training.”

Along with his team, Sullivan, who has been with GMAC for almost 14 years, created
fraud training for both correspondent and consumer lending employees to help eliminate
the problem. His team includes the Minneapolis crew of fraud manager Brenda Maze,
lead fraud investigator Kris Slettedahl, senior investigator Rich Brown, and fraud analyst
Tim Johnson, along with senior fraud analyst Joan Cahill, in Fort Washington.

As a well-known industry expert on mortgage fraud, Sullivan was recently invited to
speak at this month’s Combat Mortgage Fraud Conference sponsored by Inside Mortgage

“Mortgage fraud can take many forms, such as multi-lien fraud (several loans are taken
out on one property), fraud to qualify (the applicant provides false information), appraisal
fraud and foreclosure schemes to name a few,” says Sullivan. “In the sessions we train
associates to look for red flags and compare the information on the application carefully
to the information found on the credit report and other documents.”

The training is made up of two sessions, the first for newer hires that covers fraud 101,
and the employee’s role in prevention, and the second for advanced employees, that
covers current trends, investment scams, and foreclosure schemes. While the training is
computer based, Sullivan feels it is crucial to meet with trainees face-to-face to show
them that no one is immune.

“It’s not about finger-pointing, but it is about education,” he says. “We use real
documents and examples with the names blanked out to make it more effective.”

While bringing loan fraud to our employees’ attention is what these classes aim to do,
Sullivan realizes he has to be careful not to make employees overly paranoid.

“The majority of the loans we process at GMAC are good loans,” he says. “We’ve simply
created the tools to bring the issue to light and teach employees when they should raise a
red flag.”

Training is mandatory for employees and kicks off in Phoenix on June 15 and 16 before


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