Using AI to Automate Mortgage Document Fraud Detection
- Peter Johnson
- Dec 22, 2023
- 7 min read
The usage of AI in mortgage operations is expanding, and one of its growing applications is detecting document fraud.
In this edition, I will demonstrate how Artificial Intelligence-powered fraud prevention can be integrated into your mortgage services.
I created a solution to show how the detection of counterfeit mortgage documents and scams can be automated using one of the newest AI fraud detection platforms.
This solution design comprises three parts:
I wish to provide you with enough understanding of AI-based fraud detection to measure if it is something that could be advantageous to your mortgage operations and how to implement it should you decide it is.The flight was late as a consequence of the bad weather.
Due to the bad weather, the flight was delayed.
It is all too simple to become absorbed in all the glitzy developments and squander funds on technologies that may not bring any benefit to the firm.
Prior to developing a resolution, I feel it is paramount to comprehend the issues in mortgage operations we are attempting to address.
Listed below is my analysis of the following:The implications of this action are far-reaching.
This action has widespread implications.
Lenders that grant mortgages receive numerous loan requests.
Financial institutions base their loan approvals on the paperwork that reflects the job, wages, possessions, and liabilities of the people applying.
It is essential to make sure that paperwork supplied by the borrower is valid in order to prevent unscrupulous individuals from securing loans for which they are not eligible.
We need to ascertain the veracity of the following document types:The school groundskeeper is tasked with maintaining the upkeep of the school's campus.
The school's groundskeeper is responsible for keeping the campus in good condition.
Mortgage documents are particularly vulnerable to being manipulated by fraudsters. By exaggerating their bank balance and concealing signs of poor financial management, it is possible for scammers to attain bigger loan amounts.
When loans are issued to those who are not eligible, they have a much greater chance of going into default or needing to be repurchased.
If a lender or broker is careless in preventing fraud related to documents, it can lead to the following consequences:The group of us went to dine at the restaurant.
We all went to the restaurant to eat.
Generally, a manual way of achieving the same result exists before automating any process.
Upon investigation, it is evident that previous methods of detecting mortgage fraud involved an in-depth examination of the agreement. This scrutiny entailed analyzing the credentials of those involved, as well as the details of the financial transaction.The office is littered with papers
The office has numerous pieces of paper scattered about.
The manual review of documents has several drawbacks:
The restrictions bring about major operational difficulties, such as:It's imperative that you give me a call.
It is essential that you contact me.
Employing AI to automate the procedure of fraud detection is the new approach.
AI-based fraud detection products carry out hundreds of assessments on each document. These programs can quickly deliver a risk score along with a justification for the score.
It is difficult to pinpoint the exact type of fraud detection tests that technology runs, since different technology providers may take alternative routes.
I believe almost all fraud detection products incorporate shared levels of checks.
Computer vision-based AI is utilized to detect document tampering by searching for altered pixels that might not be visible to the human eye.
Drawing upon information found in documents, ML fraud detection uses historical fraud data to train models and make predictions.
Third-party validation involves verifying details obtained from documents utilizing information from their archives as well as from external sources.The evidence suggested an agreement between the two parties.
The evidence indicated that there was a mutual understanding between the two parties.
The utilization of Artificial Intelligence in fraud detection brings about several advancements that were previously inaccessible using prior methods.
The new capabilities lead to advantageous business results such as:The professor's teaching was sub-par.
The professor's teaching was below average.
Now that the rationale behind our actions has been established, let's move on to the technique we should use.
This is an outline of a system for identifying mortgage fraud through the use of artificial intelligence technology.
Each subsection provides a more in-depth exploration of each solution option.The elderly gentleman was walking with a cane.
The elderly man was ambling along with a walking stick.
The initial challenge to tackle is the lack of access to documents by our fraud detection system.
The initial step to our resolution necessitates the gathering of documents into our system, as automation is impossible to realize without them.
It is typically possible to obtain all required documents through API from either the LOS or POS.
Occasionally, you may find it necessary to retrieve documents from a Email inbox, DropBox folder, or FTP server folder.The restaurant has a limited menu.
The restaurant has a restricted menu.
Our systems necessitate the processing of documents.
The issue is that the Files we get from our integration source aren't identical to Documents.
Often, a single file will comprise of multiple documents.
The answer is to employ a document classification system to pass files through, giving a result of classified single-document files which can then be processed.
In this post I wrote, you can acquire additional information regarding document classification.The new computer system has been implemented
The new computer system has been put into practice.
Although fraud detection with AI is significantly more economical than manual analysis, it still incurs some costs.
Oh, that is unpleasant, I understand.
Given the constraints placed on our finances, it is important to exhibit caution and not irresponsibly send whatever documents are available to the fraud detection system.
Utilizing information obtained from document categorization, only those records that are especially vulnerable to deceitful activity, will be directed for processing.I am going to be out of town for the weekend.
I will be away for the weekend.
That's where the wonder occurs.
For this step, the routed documents are input into the Resistant.ai AI fraud detection technology.
For more information about the selection of products used for this solution, please refer to the section below.
Using the API is very simple:
Resistant.ai performs over 500 checks within a span of 30 seconds, generating a Risk score as well as Indicators as a result.
A document's risk score indicates its position on the range from "Trusted" to "High Risk"; this might be any of the following four values: "Trusted," "Normal," "Warning," or "High Risk."
The system's score is based on the indicators it provides, which can be either beneficial or detrimental.
Next, the Risk score and Indicators are input into the subsequent node of the solution.The company has not yet made a decision regarding the matter.
The company has yet to decide on the issue.
Resistant.ai produces a document risk score, along with an explanation for this score.
People still have the final say as to whether a document is legitimate or not.
Most of the documents are likely to be genuine. Consequently, automating decisions in obvious situations could prove to be a time-saving measure.
If a document has a Trusted or Normal score, I will flag it as genuine; conversely, a score of High Risk will result in it being marked as fraudulent.
In the event that the document yields a Warning score, I will escalate the matter and send it on for further manual inspection.
Once a document has been identified as needing investigation, someone must examine it to determine if it is genuine or deceitful.
We show the factors that are part of the document's score in order to cut down the time spent investigating.
Reasons to believe the documents are legitimate and reasons to suspect they may be fraudulent.
The majority of tech vendors possess their own user interface for this purpose.
In my opinion, Indicators generally furnish enough data to arrive at a conclusion without possessing expertise in document fraud identification.The TV was so loud that we had to turn it down
The volume of the TV was so high that we needed to lower it.
We can determine whether a document is genuine or counterfeit either through an automated process or after conducting an inquiry.
The final part of the answer is to inform downstream systems of this data so they can take the necessary steps.
It could involve tagging a file within a LOS, generating a ticket, or sending an automated notification to the pertinent individual.The customers were annoyed by being made to wait in line.
The customers found it irritating to be kept waiting in line.
I put together this solution with an AI fraud detection product as a focus. I looked at the technology providers that are available and analyzed them. Based on my evaluation, I have chosen my preferred option for this solution.The company is in the process of trialling new software
The company is currently testing new software.
You can choose to construct your anti-fraud technology by utilizing lower-tier infrastructure providers such as AWS, GoogleCloude, or Azure. An alternative would be to purchase one from a product firm.
I think it would be illogical for mortgage lenders to develop their own fraud detection technology most of the time.
This sophisticated piece of software will be pricier, take more time to acquire, and have less precision than if purchased from a technology vendor.
In choosing tech providers for this solution, my attention was solely on those offering AI-based fraud detection solutions.
I encountered the most pertinent AI anti-fraud technology for mortgage lenders while conducting research for this solution.The instructor gave the pupils their study materials.
The instructor provided the students with their study materials.
In my opinion, any of the four products listed above should suffice for your AI fraud detection requirements.
In considering a solution, I took notice of the Document Forensics product from Resistant.ai.
Having reviewed their website and documentation, the following contributed to my decision, though I have not been on a call with them:The professor discussed the lecture’s main ideas with his students.
The professor went over the primary concepts of the lecture with his pupils.
It is my wish that this blog post served to give insight into employing AI for the purpose of automating mortgage document fraud recognition.
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