Lax Mortgage Underwriting Standards Result In Headaches For One Identity Theft Victim

The Miami Herald ran a story recently about a Miami-area executive who says negligent underwriting on the part of JP Morgan Chase allowed him to become a victim of mortgage fraud. Reportedly, his home was broken into and thieves made off with a jewelry box containing his social security card. About a year later, he learned that two homes had been purchased in his name and JP Morgan Chase, who ended up holding the mortgages, was suing him for foreclosure. After obtaining copies of the loan documents, he says he discovered that the only correct information on the mortgage application was his Social Security number. He believes that the mess could have all been prevented had the mortgage underwriter simply made one phone call.

Reportedly, a spokesman for Chase Home Lending says the loan was bought from another originator, and that Chase acted quickly to address the identity theft once they learned of it. For more, see Lax lending fuels fraud, foreclosures (The mortgage underwriting process has been criticized for lax standards).