Congressman Kenny Marchant (R-Texas) has introduced an electronic verification process requirement for those seeing loan modifications and refinancing through FHA, Fannie Mae and Freddie Mac.

Marchant points out that studies have shown that much of the mortgage fraud that left unqualified people in homes they could not afford involved undocumented workers who received assistance in providing false employment and income documents by mortgage brokers anxious to close deals between 1995 and 2005.

On his website Marchant sites a Nevada case where a mortgage broker falsified documents for illegal aliens in 233 cases and 58 of these loans have since gone into default.  The mortgage broker has been found guilty of 32 cases of fraud and one case of conspiracy.

Marchant maintains that by adding an E-Verify process to establish the Homeowner’s legal status before a loan modification or refinance application is taken the FHA and GSA agencies can save millions of dollars in wasted time and dollars in processing home loan applications for illegal residents.