Alex Goldovsky Calls for Blockchain-Based Collateral Tracking to Prevent Auto Lending Failures.
Alex Goldovsky, a leading expert in financial due diligence and founder of ProTitleUSA, DocSolutionUSA and OneDiligence, has issued a strong call for systemic reform in the auto lending industry following revelations from the recent Tricolor case, which exposed major verification failures and instances of alleged collateral multi-pledging.
During a recent industry roundtable, Goldovsky discussed how the Tricolor case — where the same vehicle collateral was reportedly pledged to multiple banks — underscores deep vulnerabilities in current lender verification processes.
“This incident illustrates how fragmented verification responsibilities can lead to catastrophic failures,” said Goldovsky. “Without independent oversight and real-time cross-verification, lenders are left exposed to duplicate pledging and fraudulent activity.”
Goldovsky identified several key breakdowns in the Tricolor case:
Goldovsky emphasized that the core problem lies in fragmented verification responsibilities, where loan originators often act as servicers—creating inherent conflicts of interest. He advocated for an independent trustee model to oversee verification across multiple institutions, ensuring transparency and accountability. To prevent future multi-pledging scandals, Goldovsky proposed a centralized, blockchain-based collateral tracking system for the auto lending industry.
“By hashing key identifiers—VIN, borrower, loan amount, address, and origination date—we can create immutable, verifiable records,” Goldovsky explained. “The auto finance sector needs its own version of MERS, ensuring integrity and real-time verification across all stakeholders.”
According to Goldovsky, the implementation of blockchain technology in collateral management is not only a step toward fraud prevention but also a necessary evolution to restore trust, efficiency, and accountability across the auto finance ecosystem.
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Alex Goldovsky, a leading expert in financial due diligence and founder of ProTitleUSA, DocSolutionUSA and OneDiligence, has issued a strong call for systemic reform in the auto lending industry following revelations from the recent Tricolor case, which exposed major verification failures and instances of alleged collateral multi-pledging.
During a recent industry roundtable, Goldovsky discussed how the Tricolor case — where the same vehicle collateral was reportedly pledged to multiple banks — underscores deep vulnerabilities in current lender verification processes.
“This incident illustrates how fragmented verification responsibilities can lead to catastrophic failures,” said Goldovsky. “Without independent oversight and real-time cross-verification, lenders are left exposed to duplicate pledging and fraudulent activity.”
Goldovsky identified several key breakdowns in the Tricolor case:
- Contact Verification: Incomplete borrower and dealer verification processes.
- Title Verification: Inadequate validation and mishandled lien checks.
- Third-Party Vault Certification: Absence of secure eVault or VIN certification systems that ensure each vehicle is uniquely pledged before loan funding.
Goldovsky emphasized that the core problem lies in fragmented verification responsibilities, where loan originators often act as servicers—creating inherent conflicts of interest. He advocated for an independent trustee model to oversee verification across multiple institutions, ensuring transparency and accountability. To prevent future multi-pledging scandals, Goldovsky proposed a centralized, blockchain-based collateral tracking system for the auto lending industry.
“By hashing key identifiers—VIN, borrower, loan amount, address, and origination date—we can create immutable, verifiable records,” Goldovsky explained. “The auto finance sector needs its own version of MERS, ensuring integrity and real-time verification across all stakeholders.”
According to Goldovsky, the implementation of blockchain technology in collateral management is not only a step toward fraud prevention but also a necessary evolution to restore trust, efficiency, and accountability across the auto finance ecosystem.
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