“On May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 (FERA). The new law is intended to expand the federal government’s capability to prosecute mortgage fraud, securities and commodities fraud, and other frauds related to federal assistance and relief programs, such as the Troubled Assets Relief Program (TARP). A brief discussion of some of FERA’s anti-fraud provisions appears below.
Additionally, FBI Director Robert Mueller recently stated that the FBI is discussing with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) the issue of requiring the private sector to take a more proactive approach to combating mortgage fraud. There are reports that one proposal would extend current anti-money laundering (AML) requirements to compel non-bank mortgage lenders to submit Suspicious Activity Reports (SARs)…”
Continue reading the McGuire Woods article here.
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Questions.
This law was signed in May of 2009. What changes have you seen take place since this law went into effect? For example, are lenders tightening up their review processes for potential fraud? What about at the originator level? What changes have been made at the third party broker LO level to make sure that loans are originated within the boundaries of this new federal law?