vcheck global, due diligence, loan underwriters

Loan underwriting requires meticulous verification of prospective borrowers’ history to illuminate the risks involved before the pursuit of a lending relationship. A Boston-based client focused on commercial real estate investments is able to thwart untrustworthy borrowers by maintaining scrupulous standards for its underwriting deals and partnering Vcheck Global to uncover illegal activity and mitigate risk exposure.

This firm’s underwriting process requires all potential borrowers to complete a loan history questionnaire that poses all of the common questions associated with a commercial real estate loan—including the borrowers’ history with bankruptcies, foreclosures, major credit hits, and open litigation. “The borrowers simply answer ‘yes’ or ‘no’ for each question,” according to one of the senior underwriting analysts at the firm. “We understand that everybody has gone down different paths in life, so we give our borrowers the option to come clean and disclose any credit blunders that may have happened in the past.”

Such a questionnaire helps meet federal guidelines for commercial real estate loan underwriting to prevent illicit financing and funding flows, including the latest from the U.S. Treasury Department for combating money laundering and funding of terrorism. This firm maintains prudent standards that help prevent the lending of potentially millions of dollars to criminals.

Once a potential borrower has completed a loan history questionnaire, the information provided is then verified by Vcheck Global’s highly skilled team of investigators who use advanced technologies including artificial intelligence to follow the money and uncover possible fraudulent investment deals, contract disputes, and judgment enforcements. Vcheck Global’s investigators are trained to navigate regulations and search court records, judgment enforcements, sanctions and watch lists, media reports, and—as needed—procure human intelligence for deep-dive investigations of subjects associated with large, complex deals.

“This is where Vcheck comes in to save the day,” the analyst explained. “On many occasions the Vcheck reports have saved us from lending to untrustworthy people. I cannot count how many times where Vcheck’s reports have found major litigations, foreclosures and bankruptcies that were not disclosed to our underwriting team.”

One of the many ways potential borrowers may conceal their past from loan underwriters is through the use of aliases. In a recent Vcheck Global investigation for this client, a prospective borrower who answered “no” to all standard loan history questions was found to have been concealing a criminal history. Vcheck Global investigators found that the subject used a name change to hide previous criminal activity including a mail fraud case and charges of conspiracy to defraud the United States.

At the start of every investigation, Vcheck Global’s investigators unmask name changes or aliases by matching the alias to the social security number used on past transactions. Data from county recorder offices and courts, coupled with third-party database searches, can help identify changed names and aliases. For every alias or name change encountered, Vcheck Global investigators will perform manual searches of federal, state, and local records to identify any and all associated with a subject.

In the case of the prospective borrower with the alias and hidden past, Vcheck Global found additional charges associated with the subject’s new name including mail fraud and wire fraud before becoming an FBI informant as part of a plea deal to reduce prison time—on top of multiple foreclosures and judgments. “Vcheck’s reports laid out all of the credit hits in a clear way where we could make an informed decision to not pursue a lending relationship with this person,” the analyst said. “This is just one example of many where Vcheck has enhanced the client’s investment vetting process.”

Sources:

https://www.law.com/newyorklawjournal/2020/06/03/active-u-s-enforcement-of-anti-money-laundering-rules-continues-unabated/?slreturn=20200518125604

https://www.fdic.gov/regulations/laws/rules/2000-8700.html

https://vcheckglobal.com/news/uncovering-aliases-do-you-know-who-you-are-doing-business-with/ 

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