Mortgage Services and Loan Tips

Mortgage and Identity Theft: What You Should Know

If you've ever applied for a mortgage, particularly since credit guidelines tightened in recent month, you know that the amount of information you disclose to your lender could sink you financially, should it fall into the wrong hands. It really is a a little scary when you ponder it a bit. I mean, after all, they have your social security number, your birth date, your bank account numbers, and a hair sample (just kidding on the last). But, really. How do you know that you are secure?

The Gramm-Leach-Bliley (GLB) Act requires companies defined in law as "financial institutions" to ensure confidentiality and security of your personal information. Which includes mortgage lenders. In addition, as part of this act, issued the Federal Trade Commission (FTC) Safeguards Rule, which mandates measures to keep customer information safe.

So if you apply for a mortgage, and you are concerned, should your lender should be able to give you a written security plan that describes their program to protect you. The plan's appropriateness should vary in relation to the company size and complexity and the nature and scope of its activities. You would not expect a company with 20 employees must have the same guidelines as a company with 2000 employees. But there will be some similarities.

The written plan should outline that all staff be trained and informed about the policies. This is important. How good is a plan if nobody knows how to implement it? Typically, a lender have more ways to detect identity theft apart from suspicious documentation or squirrelly applicants. Most use third party sources to confirm a customer's identity beyond driver's license or government issued identification. These are background search programs with strange names like Lexis Nexus and Interthinx. And they work.

The company's policy should require employees to change their various passwords regularly and have a good security systems to prevent "hackers" from accessing your information. We hear again and again the horror stories about hackers and their nasty activities. In addition, the company should shred documents and lock files at night. Who wants their W-2 shows up in a company's dumpster? Who wants nosy cleaning crew flip through their file? Not me. None.

Furthermore, staff should be trained on how to detect fraudulent documentation or suspicious activity. And they need to understand they should not discuss your information with other employees who do not need access to your file, or they should discuss your profile with spousal unit at home. It's a bit like being a doctor. They can not discuss the patient's medical records. A lender can not discuss your accounts.

And what happens if a lender suspects a borrower has been the victim of or even creepier, commit identity theft? The lender should have clear guidelines for how the individual discovering the discrepancy should handle the "red flag". After all, when the red flag occurs How lender know if she speaks to a victim or a perpetrator at the time of discovery? So it must be handled properly. And lender employees need to have a clear understanding of exactly how to handle these situations.

So when you apply for a loan, find out beforehand if you are being protected properly. You have enough to contend with in those days when getting a mortgage. You deserve a lender who meets these regulations and acts. We all deserve such protection.

About the Author

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Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.