As a Mortgage Professional, you'll recall back in November 2007, the U.S. Federal Trade Commission (FTC) established a set of rules for regulating access to private information in an attempt to help STOP Identity Theft. These rules target several industries, naturally ours is one of them ... it's all about 'Red Flags'.
What is a Red Flag? A Red Flag can be any pattern, practice or activity that triggers the suspicion that identity theft may have occurred.
On November 1, 2008, those companies who were required to comply, must be in full compliance with the Fair and Accurate Credit Transactions Act (FACT Act) Identity Theft Red Flag (FACT Act Section 114) and Address Discrepancy (FACT Act Sections 114 and 315) rulings. As it turned out, the FTC has extended the deadline to May 1, 2009.
Have you developed a written program that identifies and detects the relevant warning signs – or “red flags” – of identity theft? If not, Get With It!
This is one of those things I have spoken about in the past. If you're a mortgage broker running your own shop, it's way past time for you to mature in business, and finally realize there's a lot more to it than making bank deposits - it ain't all about sales! Stuff like this is vital to operating a proper business ... read all the fine print about your requirements HERE.
Wondering where to keep that written policy of yours? If you still make the mistake and permit customer information/files, etc. to be taken home by any of your personnel, then you could keep it in the same three ring binder as your written company policy in compliance with The Financial Modernization Act of 1999 (also known as the Gramm-Leach-Bliley Act); the specific detailed obligations you have on this are located HERE.
Treasury Explains Housing Plan Website's Use
The Treasury Department has explained how to use a new website that allows homeowners to learn about Obama administration's new housing plan and whether they can qualify for a loan modification. The new website HERE has a calculator that allows homeowners to estimate how they could benefit from a modification. "Be sure to check out the calculator that allows homeowners to estimate the reduction to their monthly mortgage that they might get under the plan," a White House blog says. Meanwhile, agency officials are working on a net present value (NPV) test that servicers will use to determine if a loan should be modified. They plan to roll out a standard NPV model soon that provides some flexibility for servicers. For example, a servicer with a low re-default rate would not have to use the national rate.
Fraud Losses in 2008 May Have Topped $25B
Mortgage-related fraud may have cost the industry between $15 billion and $25 billion last year, according to an estimate made by the Mortgage Asset Research Institute. Speaking at a fraud prevention conference in Las Vegas, MARI's Merle Sharick told the audience, "Mortgage fraud is a giant and growing cause of losses." Speakers at the conference said fraud might be a bigger drain on the mortgage business than most executives realize. The last official FBI count put the industry's annual loss due to mortgage fraud at $5 billion. But Scott Broshears, the special agent in charge of uncovering and prosecuting the crime, said his agency is "probably easily investigating" crimes valued at double that amount. Lending further credence to the belief that much of the fraud for profit taking place is doing so at the hands of organized crime, James Freis, director of the Financial Crimes Enforcement Network, a division of the U.S. Treasury, said his agency has noticed a direct link between mortgage fraud and money laundering. "Mortgage fraud is a highly moving target that requires the disposition of large sums of cash," he said. "These are often interconnected. These are not separate things. Profits need to be integrated into the financial system." Scott Brower, the U.S. attorney for Nevada, told the conference that even with the change in administrations in Washington, mortgage fraud "will be on our radar screens for the foreseeable future." He said, "We're trying to get ahead of the problem, but I'm not sure anybody in law enforcement can. We're just scratching the surface. We're likely to be very, very busy for months and years to come."
FTC Enforcements
The Federal Trade Commission delivered a presentation to the U.S. Commission on Civil Rights. She said that the FTC focused on the most egregious illegal lending practices of nonbank lenders. Another investigation involved allegations that mortgage broker customers of Homecomings Financial LLC charged blacks and Hispanics more than similarly situated whites.
FBI Targeting Mortgage Industry Insiders
Suspicious Activity Reports filed with the Federal Bureau of Investigation are on pace to reach nearly 70,000 by the end of this fiscal year, according to a prepared statement by the FBI's deputy director. He was speaking before the House Committee on Financial Services. "Industry insiders are of priority concern as they are, in many instances, the facilitators that permit the fraud to occur," he explained.
Mortgage Fraud Lawsuits to Skyrocket
At the beginning of 2007, there were no mortgage lawsuits pending by the Federal Deposit Insurance Corporation, an FDIC official told Congress. Now, more than 100 mortgage fraud lawsuits are pending, he said. Another 900 civil lawsuits are projected during the next three years as a result of claims currently under investigation.
Mod Biz Booming
At least until the Senate passes H.R.1106 and that bill's CRAM-DOWN section, then BK judges will do the MODS at no cost or aggravation to the borrowers! Meanwhile, you can click the link HERE and read the Treasury Department's Modification Guidelines. And, this link HERE will tell you if they have a FannieMae owned or guaranteed mortgage; for Fannie's snot-nosed step-half-brother Freddie, his link is HERE
Modifications were completed in the fourth quarter on 23,777 loans owned or guaranteed by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency reported. Activity jumped from 13,488 modifications in the third quarter. A new offering from CGI Group Inc. will increase a servicer's capacity to complete loan modifications, a statement said. A Home Affordable Modification module has been added to Response Analytics' distressed portfolio management solution, a statement earlier this month said.
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