ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, January 1, 1996 TAG: 9601030002
SECTION: MONEY PAGE: 8 EDITION: HOLIDAY
SOURCE: JANE BRYANT QUINN WASHINGTON POST WRITERS GROUP
When a mortgage broker approached a Michigan mortgage company last year, offering to sell it some attractive loans, the company was interested. But first, it ran the broker's name through the 3-year-old National Financial Fraud Exchange.
The broker said he had practiced law in Joliet, Ill. - which turned out to be true, in a way. He had been in state prison there. His law practice consisted of filing appeals for his own release.
Somewhere, that broker is still at work - probably selling financial products and doubtless heading for another forced stay in Illinois. On his way, he's going to steal some money - maybe even from you or me.
Every day, we entrust our money to somebody we hardly know: stockbrokers, financial planners, insurance agents, mortgage brokers, appraisers, salespeople for private investment deals. Some are honest; some are marginally deceptive; a few wouldn't hesitate to steal.
It's not easy to check these people out. Until recently, for example, the National Financial Fraud Exchange's files were open only to corporate clients.
But now, they're open to the public. You can run the names of your financial advisers through the exchange database to see if anything disreputable turns up.
The national exchange is the brainchild of D. James Croft, executive director of the Mortgage Asset Research Institute in Reston, Va. It collects public information about financial and real-estate infractions and frauds from about 100 government and private watchdogs.
Among the groups the exchange taps: the two major stock exchanges, the five regional exchanges, all of the state securities offices, the Securities and Exchange Commission, the National Association of Securities Dealers, the National Futures Association, the Commodities Futures Trading Commission, state real-estate regulators, the Department of Housing and Urban Development, the Federal Deposit Insurance Corp., the National Credit Union Administration and the U.S. Postal Inspection Service.
The database contains some 150,000 names, Croft said. It's growing at the rate of 2,000 cases a month.
It costs $29 to run a name through NAFEX at (800) 822-0416. If there's a hit - meaning that a financial professional has a stain in his past - you might be told right on the telephone. Or, a written report can be mailed or faxed.
You'll also be told about ``near hits'' - information that's close but not exact. For example, NAFEX might spot someone with the same name but who used to live in a different state. That might be the person you're dealing with, so you'd want to ask about it.
LENGTH: Medium: 55 linesby CNB