With the FTC’s further extension of the Red Flags Rule deadline, Mortgage Compliance Advisors encourages mortgage brokers and lenders not to put off implementing their Red Flag Policy.

May 28, 2010 – This morning, the Federal Trade Commission announced a further extension of the enforcement date for the Red Flags Rule. The previous enforcement deadline, June 1, 2010, has now been extended to December 31, 2010. The FTC states that the reason for the extension is to allow congress time to “consider legislation that would affect the scope of entities covered by the Rule.” However, the FTC goes on to say that the announcement “does not affect other federal agencies’ enforcement of the original November 1, 2008 deadline for institutions subject to their oversight to be in compliance.”*

The FTC’s Red Flags Rule is designed to reduce identity theft by requiring organizations to “implement a written Identity Theft Prevention Program designed to detect the warning signs – or ‘red flags’ – of identity theft in their day-to-day operations, take steps to prevent the crime, and mitigate the damage it inflicts.” Mortgage Compliance Advisors reminds mortgage brokers and lenders that although the enforcement deadline may have moved, it is still a sound business decision to implement a written identity theft prevention program as soon as possible. Most financial institutions are already taking steps to mitigate identity theft, but a written policy is a smart way to help protect customers and the company and to make sure proper procedures are followed.

As a simple solution to help mortgage brokers and lenders comply with the Red Flags Rule, Mortgage Compliance Advisors announced the launch of its succinct, customizable Red Flag Policy. The Policy is tailored specifically to an organization’s size, risks, and complexity.  To create a customized Red Flag Policy, clients may purchase the Do-it-yourself template; or the client may provide MCA with basic information about the organization, and MCA can create a comprehensive, customized Red Flag Policy in just a few hours. These options provide a way for the client can have their policy taken care of well before the deadline.

*(Read the FTC’s announcement at: http://www.ftc.gov/opa/2010/05/redflags.shtm.)

Call 877-226-3217 or visit our website for more information about our Red Flag Policy.

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HUD posts ML 10-19: lenders may score streamline refis through TOTAL and process, underwrite as streamline refi. read more

FTC extends Red Flags Rule enforcement deadline again to 12/31/10. read more

We want to thank everyone who attended our webinar “Red Flags of Fraud.” As promised, below you will find answers to the questions asked during the webinar. You can also download the slides from the webinar.

Question 1 – What steps would you take if the signatures did not match?

• Answer - We first suggest contacting your borrower and discussing the discrepancy with them. If you feel the situation warrants special consideration, such as a deliberate case of misrepresentation, you can contact any of the suggested sites we made available during the presentation (local HUD office, Fannie Mae or the FTC). You should retain in your file the steps you took in detecting and addressing the discrepancy.

Question 2 – Does the geographic concentration change when you look at fraud for profit vs. fraud for housing?

• Answer – The geographic concentration can definitely change.  We provided the following two sources which demonstrated significant concentrations of fraud in specific geographic location:  https://www.efanniemae.com/utility/legal/pdf/fraudstats/fraudupdate0410.pdf and www.fbi.gov/hq/mortgage_fraud.htm.  Another excellent source for information on mortgage loan fraud is through the Financial Crimes Enforcement Network, www.fincen.gov.

Question 3 – The IRS allows an ITIN number for the purpose of an individual to file their tax returns, and illegal aliens who do not have a valid Social Security Number can get these IRS issued ITIN numbers. If we discover this, what are we supposed to do?

• Answer - If you feel the ITIN number may have been misrepresented to you, you can begin by verifying the information through the IRS as well as following the steps we have suggested in reporting any deliberate acts of misrepresentation. If you are unsure whether an ITIN number itself is a valid form of identification, verify with your lender what they will accept.

Question 4 - What do you “actually” do when you find different addresses on documents?

• Answer – We suggest first contacting your borrower and discussing the discrepancy with them.  There may be a logical explanation.   If you feel the situation warrants special consideration, such as a deliberate case of misrepresentation, you can contact any of the suggested sites we made available during the presentation (local HUD office, Fannie Mae or the FTC).  You should retain in your file the steps you took in detecting and addressing the discrepancy.

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MCA offers a comprehensive Red Flag policy, and we can provide one for you quickly and easily.

• Call 877-250-5243 or click an icon under “Contact Us” for more information or to get started.

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(Mortgage Compliance Advisors, LLC (MCA) makes reasonable efforts to ensure the accuracy of the answers. MCA makes no express or implied warranty of any kind respecting the information presented and assumes no responsibility for errors or omissions. This online chat is not legal advice and should not be used as a substitute for proper professional or legal advice.)

FNMA updates Selling Guide: mortgage insurance clarifications, Community Seconds eligibility, title exceptions, etc. read more

Fannie Mae servicing notice modifies reference to foreclosure time frames in previous announcement. read more

VA posts Circular 26-10-6: Revised VA Making Home Affordable Program. read more

HUD: Requirements effective from 10-18 “Update of Property and Preservation (P&P) Requirements and Cost Reimbursement Procedures”

MBA Reacts to Passage of Financial Regulatory Reform. read more

We have posted the slides from our May 2010 webinar “Red Flags of Fraud.” If you would like to view or print previous presentations, you can find the slides from all of our past webinars under the News and Resources tab.

As always, we are happy to hear from you and encourage you to submit requests for webinar topics to info@mortgagecomplianceadvisors.com.

• Download the slides for “Red Flags of Fraud”

Check back soon for answers to all the questions asked during the webinar!