Stung by excessive mortgage defaults and fraudulent loan applications in the late 1980s, the nation's biggest home mortgage lender has now taken the wraps off part of its defense for the 1990s: a "red-flag" alert system that can spot cheats, fibbers and outright con artists before their loan applications get approved.

The Federal National Mortgage Association (Fannie Mae) has studied thousands of its bad loans from the past decade and compiled a detailed profile of early warning tip-offs. Though Fannie Mae hasn't sought to publicize the tip-offs to the general public, it has been actively training local lenders on how to detect misinformation.

The red flags pop up in every phase of loan origination, said Robert J. Englestad, Fannie Mae's senior vice president for mortgage and lender standards. They range from subtle slip-ups by larcenous applicants to silly-sounding gaffes.

For instance, when a borrower lists his or her employment information on an application, Fannie Mae research has found all the following to be hints of potential problems ahead. You get a red flag if:

The date of hiring you list at your current job is a weekend or a holiday. Fibbers and jokers who arrange for "verifications" of false salary or employment information by friends and colleagues can still be spotted by errors like this, according to Fannie Mae's research.

Your employment verification form comes back to the lender without a fold -- a tip-off that the form was never mailed to the employer but was probably filled out by the applicant.

The address you list for your employer is the same address as the property you're trying to buy.

Your employer's address is a post office box or your employer's telephone repeatedly is answered by a machine or answering service.

One of the most common forms of misinformation that local lenders receive relates to the amount of money a loan applicant has -- whether bank deposits or other assets, Englestad said.

Parents, friends, employers and even home sellers commonly loan buyers cash to put on deposit for the routine "asset verification" checks that accompany most mortgage applications.

Once the loan is made, the money is then returned, thereby defeating the lender's underwriting standards. Another frequent ploy is for sellers to advance cash to a buyer and then tack that amount onto the contract price for the house.

Fannie Mae now targets these red flags:

All deposit verifications that show round-dollar amounts, especially in interest-bearing accounts.

Any young borrowers with substantial cash in the bank -- often a tip-off to a gift.

Any high-income borrowers with relatively little or no cash on deposit -- a tip-off to undisclosed liabilities.

Any significant changes in deposit balances over the two months before the loan application.

Settlement or escrow closing checks drawn on different depository institutions than the one that sent back the deposit verification form at application.

Credit reports are another source of red flags. Fannie Mae has instructed local lenders to be on the lookout for:

Any credit reports with "nicknames having no relation to {the borrower's} real name," such as Buddy, Ace, Lefty, among others.

Any applicants showing high incomes, but having no "prestige" credit cards such as American Express or Visa Gold.

Lines of credit all opened at the same time for no apparent reason.

Spouses who claim they have no credit histories.

Income-tax returns contain clues, too. Fannie Mae asks local lenders to raise a red flag on any returns that show the following:

The taxpayer is in a high tax bracket, but does not use a professional tax preparer.

Income and deductions on the return are in even-dollar amounts.

A paid preparer of the borrower's tax return does the return in handwriting instead of type.

The applicant is self-employed, but shows no estimated tax payments having been paid.

To spot borrowers who tell the lender they plan to be "owner occupants" but actually intend to be nonresident investors, renting out the unit, Fannie Mae hasIn a typical year, Fannie Mae takes over thousands of homes because of nonpayment by borrowers, some of whom lied to lenders about income or assets. intensified its program of "post origination" audits. These occur in the early weeks or months after settlement.

Local lenders now:

Check the name under which the utilities for the house or condominium are listed and the date they were turned on. (If it's not the borrower's, then the game is up, fast.)

Make unexpected spot calls to the borrower at his or her "former" home phone number. Auditors say this is particularly effective in catching cheaters because they forget to make such a basic switch.

Fannie Mae, which buys loans from primary lenders, packages them and sells them to investors, has developed dozens of other techniques to spot the little -- and big -- forms of cheating that so often accompany loans that go belly up. In a typical year, Fannie Mae ends up taking over 7,000 to 9,000 homes because of nonpayment by borrowers, some of whom lied to their local lenders about income, assets or credit history.

Local lenders selling mortgages to Fannie Mae have special motivation to use the new red-flag system: Fannie Mae forces them to buy back the properties when loans go sour, laying out hard dollars as a penalty.