Asset Searching For Recovery Actions - The Decision Makers Critical Tool Part 2
In Part One of this article we took a look at some minimum recommendations for asset searches as a recovery medium.
This discussion is based on the assumption that an asset search has already been
determined to be sanctionable by, for example, a loan in default, a judgment that has been rendered, a court order obtained for the release of
credit information in cases that are not clearly defined under the FCRA or extended consent given in a creditor/debtor or employee - employer
relationship.
As Part One suggested, to properly identify a non-corporate subject, fraud examiners in non-law enforcement environments should take the
following steps:
?Obtain credit reports form the three major credit bureaus, per FCRA requirements
?Obtain social security traces form the three major credit bureaus.
?Obtain address update/credit report header information from the three major credit bureaus.
?Match the information obtained through the independent sources to the information presented by the subject of the asset search.
Part One also provided suggestions for determining assets, including real property ownership, vehicular searches, vessel ownership, aircraft
ownership, and banking information. Following is additional financial and business information that should be gathered, as well as
liability-related data that impacts the subjects net worth in a recovery action.
Financial Information
Credit reports should be obtained from all major credit bureaus in order to completely determine the subjects credit worthiness or credit status.
The Federal Home Loan Mortgage Association (Fannie-Mae) determined several years ago that a minimum of three national credit bureau repositories
should be accessed to develop credit information prior to the qualification for a mortgage loan.
While this is the standard, many companies do not provide this information in the pursuit of the asset search, and limit their
request to only one major credit bureau. Some difficulty also exists with respect to the investigative communitys lack of access to major
credit bureaus, and many credit reports procured for investigative purposes are, in fact, procured through third- and fourth-party blind
sources.
Credit bureau-based research agencies are usually your best source for credit and financial information, as well as banking data, since their
primary focus is in the credit community and understanding the limitations of the credit system, as well as knowledge of better access to the
credit bureaus. This assures their continued success in operating their business.
Credit reports are important not only from the standpoint of providing identification information, additional addresses unknown to the
client, and/or additional name variations in the form of aliases and/or akas, but they also provide an almost up-to-the-minute window of credit
activity pertaining to the subject.
This gives an impression of the subjects credit worthiness with respect to paying off the obligations the subject is currently
faced with, not to mention, in many cases, his or her current whereabouts.
If an overwhelmingly favorable credit report is generated on the individual, chances are strong that the subject may be hiding assets, and a more
aggressive collection and/or litigious pursuit is justified.
If the individuals credit is in a pre-bankruptcy mode, chances are strong that the lack of discovery of available assets, which
would affect the decision whether to charge-off or litigate the matter, is more easily palatable by the analyst.
Credit histories also contain adverse public records that may not have been developed throughout the course of the search, since the primary
search parameters are on an exact name basis, and usually a specific jurisdiction basis only.
The benefit of credit reporting agencies is that they procure information from large
repositories, which contain information from jurisdictions that may not necessarily be germane to the original asset search request.
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