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3 Popular Ways Borrowers Falsify Income and Employment

Jan 23, 2018 by Tim Simpson

We’ve come a long way since the 2008 financial crisis. The phenomena of NINJA and stated income loans has died off. The current state of mind for every mortgage investor is VERIFY, VERIFY, VERIFY! People want to know exactly what they’re invested in, and verifying income & assets is an extremely important part of that.

Unfortunately, verifying income in a trustworthy fashion is more difficult than it may seem. There are many ways that a borrower may try to manipulate the system, and either stretch or completely fabricate the truth.

Let’s take a look at some of the more common methods less than scrupulous borrowers will use to obtain a loan:

1. Burner Phones

Walk into your nearest 7-Eleven, and chances are they’ll have pre-loaded phones for sale. These are cheap flip phones with a unique phone number, and a small number of minutes to be used. These are more commonly referred to as “burner” phones, because many people use them for illicit activities, then “burn” or trash them when they are done. 

Fake Employment Verifications

When a borrower is filling out a loan application, they can say they work for ABC company as a financial analyst and they make $80k per year. In reality, the borrower works for XYZ company as a customer service rep, and makes $40k per year. However, they’ve found their dream home and will stop at nothing to get it. Therefore, they buy a burner phone. They list ABC company as their employer on the 1003, and list the burner phone’s number as a point of contact. When verifying this income, a processor (or investigator) may call that number. The borrower knows that whenever that burner phone rings, to answer it as “ABC Company, how can I help you?”

The borrower then provides the fax number or email address for the processor to send an employment verification. When received by the borrower, they fill it out saying they make $80k as a financial analyst, and sign it in someone else’s name.

2. Right Company, Wrong Person

In this situation, a borrower really does work for ABC Company. They work in the marketing department, and claim to make $60k annually. However, the borrower really only makes $45k. The borrower enlists their favorite co-worker to “help them out” with getting a home. The borrower provides a phone number for ABC Company which rings to his friend’s desk.

If a lender were to Google that phone number, they might see that it belongs to ABC Company and consider it validated! When the lender calls that number, the employee will provide them their direct fax line, fill out the verification with embellished information, sign it in the company HR rep’s name, and send it back to the lender without a hitch.

3. Fake Verification Services

Arguably the most elaborate form of deceit, is the rise of fake verification services easily found through Google search. They work similar to this:

A con man buys 10 burner phones. He affixes a label such as “ABC Company” or “Perfect Plumbing” to each phone. The con man tells borrowers that for the low, low price of $300, he will pretend to be a certain company, and verify a borrower’s predetermined wages. When the phone labeled “Perfect Plumbing” rings, he will answer it as “Perfect Plumbing, how can I help you?”

He provides a fax number for the request, fills it out as agreed upon by the borrower, and sends it back to the lender. These pop-up shops were rampant during the financial crisis, but still exist today. Here are a few samples from the first page of a Google search.

Fake Employment Services

Suddenly, lending with confidence becomes much more difficult. It’s important to perform due diligence when verifying employment, and treat every file as if the borrower is trying to con you. With a sharp eye for detail, and the willingness to take extra precautions, income & employment fraud can be squashed to a minimum. This is where QuestSoft excels!



When it comes to verifications, experience is everything and we’ve got it in spades. Check out QuestSoft Verifications to see the wide range of services we provide with confidence and industry expertise.

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