How is mortgage fraud detected?

Since the publication of the first mortgage fraud white paper in 2005, mortgage fraud has continued to increase. The decline in economic conditions, free insurance standards, and the decline in home values ​​have driven up the level of fraud. Market participants commit mortgage fraud by modifying old plans, such as real estate issuance, builder rescue, and short-sale fraud, and also use updated plans, such as purchase and guarantee, reverse mortgage fraud, ready-made modifications and refinancing, And mortgages. Service fraud. Suspicious activity reports (SAR) submitted by financial institutions continue to show that mortgage fraud is a growing problem. According to the latest report from Fin CEN (Introduction to Financial Crimes), Special Zone Assets Report-According to figures, from the 2007 calendar year to the 2008 calendar year, the SAR recorded by financial institutions related to mortgage fraud increased by 23%.

The total losses incurred by the credit fraud are not known. However, in fiscal 2008, at least 63% of the best ABIs did not. Mortgage fraud investigations cost more than a million dollars per transaction. According to reports, the losses of the Special Administrative Region in fiscal year 2008 were estimated at $ 1.5 billion, while losses in the first half of fiscal 2009 were estimated at $ 1.2 billion. It is important to note that the Special Administrative Region Mortgage Fraud Report reported a loss of only 7% during this period. No loss or any other search and rescue reports have been reported at this time.

Basic mortgage trading

 

 The underlying mortgage transactions are largely the same whether the purpose of the loan is to purchase real estate, refinance an existing loan, or obtain a loan for non-mortgage real estate and can be offered through one of the channels described below.

 

Retail

 

In retail transactions, borrowers order directly from the credit officer of the financial institution. These mortgage transactions are the most basic and have the least number of third parties that can include appraisers and foreclosure agents. Typically, an application suite is created consisting of financial data, credit reports, guarantee assessment reports, such as assessments or assessments, title data, and various other credit card-related documents, which are provided to subscribers on credit. Upon approval, the financial institution issues the funds to the closing agent and distributes them to various parties. The loan package is returned to the financial institution and verified for quality and accuracy. The loan is kept on the books of the financial institution or sold on the secondary market. Retail origins include only loans closed in the name of a financial institution.

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Origin of intermediation

 

A loan from a broker is similar to a retail transaction, except that the borrower submits an application to a mortgage broker. A broker is a business or person who acts on behalf of a borrower or financial institution that matches the borrower’s financial needs with the institution’s mortgage program. Brokers are rewarded when they receive a commission expressed as a percentage of the total loan amount (for example, a 1 percent upfront fee) from the borrower or by a performance-sharing premium from the lender when the loan closes.

 

Brokers play an important role in the implementation of the following loan terms and have an impact on the overall loan transaction. The brokers act as the contact point between the lender and the lender and combine the signatures of other parties to complete the transaction. The broker may perform some or more of the loan management functions, including, but not limited to, the receipt of loan applications; request credit and security reports; ensuring income and employment of the borrower; Once the broker has collected the relevant information, the order with the supporting documents is submitted to one or more of the financial institutions for payment. Accounting scripts analyze data and decide on merits. The Ministry of Finance can also carry out quality assurance activities, such as income and re-verification. A copy of the loan approval package, along with documents prepared on behalf of the financial institution, is returned to the broker. Once the loan is closed, the entire package must be returned directly to the Ministry of Finance. In addition, the finance ministry may review the quality of the loan and keep it in its own bag or sell it.

 

Debts Purchased From Agent

 In this process, the borrower seeks and completes the loan with a representative of the finance department, which may be a home loan company, bank, credit union, or credit union service group. A representative can close the loan with a home account in his or her own name or with a loan from the lender. Without the opportunity or desire to keep the debt in his or her own pocket, the agent will sell the loan to a financial institution. The consumer’s financial institution is not involved in the initiation of the transaction and relies on the agent in accordance with the rules of the financial system, the certificate, and the terms of the loan agreement. The financial services unit can perform a quality control test before purchasing it. Similarly, retail institutions should evaluate budget records or audit reports and assess the stability of regulatory standards, regulatory and regulatory frameworks, as well as the needs of financial institutions.

 

Loans can be registered or sold in the investment portfolio of financial institutions. In the “”designated writing”” relationship, the financial institution authorizes the author to operate, write and close the loan in accordance with the financial institution’s operating and writing requirements. For these high-risk relationships, proper commitments, internal controls, agreements, quality assurance, and ongoing evaluation are essential. The sales and broker performance processes are clearly listed in Appendix B. Each service provides detailed instructions on the control of financial institutions on their preparation and third parties (including sellers) and the risks associated with them. Inspectors are encouraged to read carefully and consider the guidance given by their institutions when examining provider arrangements. In addition, the SAFE Act 2008 requires all mortgage entrants to obtain a license and/or registration. The system is also used by licensed real estate companies. There is some information available on the website, with full permission, registration, and operation process, and it is expected that it will be available to the public on the website shortly.

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