By Huber Bongolan
In real estate lending, we all love to celebrate the wins. The closed deal, the funded draw, the successful exit. But there’s a quieter battle being fought behind the scenes: the fight against fraud.
Our team attended Fortra Law’s Innovate conference in Newport Beach and sat in on a sharp panel on fraud prevention and risk mitigation. It was a reminder that while fraud isn’t flashy, it’s one of the biggest threats to our industry’s integrity and profitability.
Let’s walk through the key takeaways that stuck with me; because in our world, a little extra vigilance can go a long way.
You might recognize the usual suspects, but here’s a snapshot of what’s on the rise:
Each of these can crater a deal, and your reputation, if not caught early.
AI has made it easier than ever to generate fake bank statements, leases, and IDs. That means even “clean” paperwork can’t be taken at face value anymore.
Pro Tip: If it feels off, pick up the phone and verify the info directly, especially with docs like statements, payoff letters, or third-party contact info.
A classic red flag is when a borrower demands a same-week close (especially on a refinance) with no logical reason. Urgency isn’t always a problem, but manufactured urgency often is.
Ask the hard question: Is this timeline real, or are we being pushed to skip steps?
One red flag doesn’t mean you kill the deal. It just means it’s time to slow down, ask more questions, and get a second or third set of experienced eyes.
At Flipside Lending, we always say:
Credit and Sales need to meet in the middle.
Sales wants to close yesterday. Credit wants to tap the brakes. The best results happen when both sides agree on a path forward.
Know your borrowers. Know your brokers. Fraudsters are much less likely to succeed in ecosystems where people pick up the phone and check on each other.
Long-term relationships reduce risk. So does a healthy dose of skepticism.
Loan stacking is real and nasty. Here’s how it works:
A borrower applies to multiple lenders at the same time and manages to get all of them to fund on the same day. Each lender thinks they’re in first position. But only one of them is.
You often don’t find out until after closing, when the county recorder tells you you’re second or third in lien position.
We now run final title checks right before funding and confirm that no other liens are pending. You should too.
This one hit hard.
Several panelists shared stories about elderly borrowers who were listed as guarantors without fully understanding what they were signing. Often, a relative or operator is running the deal, and the older family member is listed to qualify for better terms.
It’s on us to pick up the phone and confirm they’re truly aware of the terms. Many times, they’re not.
This isn’t just risk management. It’s the right thing to do.
Fraud prevention may not be the sexiest part of lending, but it’s one of the most important. And as technology evolves, so do the schemes.
At Flipside Lending, we balance speed with scrutiny. We want to close deals fast, but we also want to sleep at night knowing they’re clean, secure, and built on trust.
If you ever have a gut feeling something’s off, don’t ignore it. Pause. Verify. Ask the hard questions. You’ll be glad you did.
If you have a deal to discuss, let’s talk. Email me at hbongolan@flipsideloans.com.
