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Posts Tagged ‘red flag rules’
04
2010
MCA Monthly Compliance Update – November 2010
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.)
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.
Check back soon for answers to all the questions asked during the webinar!
02
2009
MCA Monthly Update – July 2009
Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, each newsletter we send contains underwriting tips, processing tips, and compliance updates. We hope that you find the content informative and useful.
For next month’s newsletter, we would like to address the biggest issues you are facing in the mortgage industry. Please let us know about any industry issues that you find confusing, or if you just want some more information. We’ll try to answer all your questions in the next newsletter.
REMINDER: APPROACHING DEADLINE OF RED FLAGS RULE
As a reminder, the Federal Trade Commission’s Red Flags Rule will go into effect in less than a month, on August 1. The FTC will require that all financial institutions and creditors, including mortgage brokers and mortgage lenders, have in place a written identity theft prevention program, also known as a Red Flag Policy. (For more information, visit www.FTC.gov or contact us with your questions.)
UNDERWRITING & PROCESSING TIPS
Based on some common findings from quality control audits, we have compiled a list of three tips from the month of June.
1. Make sure that the application and initial disclosures have correct dates. If they are mailed, be sure to date stamp when they were sent in the mail, to stay in compliance with the three day rule.
2. For Prepaid Finance Charges (PFC’s), make sure that they are disclosed accurately on the initial TIL, and clearly marked on the initial Good Faith.
3. Last month we mentioned that everyone should have a closing package from the closing agent for their file. FHA requires lenders to get and maintain copies of at least the HUD-1’s, Note, Deed of Trust, and the final Truth in Lending.
FHA UPDATE
HUD frequently publishes updates, known as Mortgagee Letters, containing new policies and other information for lenders. Since our last newsletter, HUD has published three additional letters. Below is a brief summary of all three:
• Energy Efficient Mortgages – Increase in the Dollar Amount of Energy Efficient Improvements: Letter 09-18. “In addition to the base FHA maximum mortgage amount limit, which is calculated on the value of the home, the mortgage loan amount for an Energy Efficient Mortgage (EEM) can be increased by the cost of effective energy improvements…
The maximum amount of the portion of the EEM for energy improvements is the lesser of 5% of:
o the value of the property, or
o 115% of the median area price of a single family dwelling, or
o 150% of the conforming Freddie Mac limit.” (Click here to view the entire letter.)
• Condominium Approval Process – Single Family Housing: Letter 09-19. FHA “is implementing a new approval process for Condominium Projects to insure mortgages on individual units… FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations.
…[this letter] provide[s] guidelines and instructions on options available to lenders to receive mortgage insurance on condominium units which are located in a project.” (Click here to view the entire letter.)
• Processing Pre-Application Firm Invitation and Firm Commitment Extension Requests: Letter 09-20. This letter discusses FHA’s “policy to grant temporary authority to Multifamily Hub/Program Center Directors to grant one extension, for up to 90-days, of the pre-application firm invitation letter and one 120-day extension of an issued Firm Commitment. The authority granted under this Mortgagee Letter expires December 31, 2009.” (Click here to view the entire letter.)
To view all HUD Mortgagee Letters for the year, click here.
With the Federal Trade Commission’s announcement of the Red Flags Rule beginning August 1, 2009, Mortgage Compliance Advisors launches its Red Flag Policy Template for mortgage brokers and lenders.
Salt Lake City, UT – May 21, 2009 – Earlier this month, the Federal Trade Commission announced its extension of the Red Flags Rule from May 1 to August 1, 2009. Beginning August 1, all financial institutions and creditors with covered accounts must comply with the Red Flags Rule. (For more information, visit ftc.gov.) The FTC stated that this 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.” An organization’s Identity Theft Prevention Program, also known as a Red Flag Policy, must be appropriately tailored to its size, risks, and complexity. 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 template.
Mortgage Compliance Advisors (MCA) is partnering with Hudson Cook, LLP, to offer this template, The Mortgage Industry Guide to the Red Flags Rule. The template contains required Red Flag policies and procedures, which include: identifying and detecting red flags, preventing and mitigating identity theft, and periodically updating the program. To create a customized Red Flag Policy, clients may purchase and personally fill out this template; or the client may provide MCA with basic information about the organization, and MCA can fill out the policy template. In order to comply with the Red Flags Rule, organizations must have the policy in place by August 1, 2009.
For more information on the Red Flag Policy Template, visit www.MortgageComplianceAdvisors.com/red_flag_rule.php or call 877-226-3217.
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