MARI has released their quarterly report on mortgage fraud. Scan the PDF here.
What systems did your company have in place to detect mortgage fraud during the bubble run-up of the past several years?
What systems does your company have in place today?
If a loan processor spots potential fraud taking place by an LO at your company, what can he/she do to report the fraud in a way that limits possible retaliation?
At the time of this article I worked for a small brokerage and we had compliance in the hands of the processor only unless their was a problem then it was handed to the company manager who then addressed any problems with the LO on the file. I was taught from the beginning when I started to work in processing in 2001 what to look for, and the guidelines just got stricter as we moved forward.
Today I work for a correspondent lender and compliance starts with the processor then to the underwriter then to our QC department then to funder PTF and post closing after.
I had a situation where I had to report a LO just last year (not licensed in state originating), I reported him to corporate they reported him to Oregon authorities as the loan was in Oregon. He was terminated, there was no retaliation against me from the LO. Our corporate office took responsibility and called the customer to assure them the loan they needed was still available at without the fees charged by LO at better rate and I still received my processing fee. If I have to report someone I am doing a service to my fellow man and am not worried about retaliation from an unscrupulous LO.
The Mortgage Asset Research Institution is a great standard to implement within your Mortgage Operation, the firm I have worked with uses an external source for QC, and that representative is within the office of coarse there own private office, so prior to funding it’s reviewed by a subordinate and then to closing and then to QC for delivery to the Secondary market, also your files out of the blue when put on Calyx were picked up after hours and reviewed just to see how you were managing your pipline, conditions etc, this I liked because there were LO’s not paying attention and of coarse possible other issues as well?
During the bubble, I worked for a large company.. mortgage sweat shop if you will. There were no mortgage fraud detection systems in place that I was aware of… only one encouraging.. go get em.. don’t ask a lot of questions .. sort of supervisor. Volume was key and for that you were awarded. There may have been a system in place at the processing center. That I am not certain of as I never had anyone question of fraud on a file. Nor was it practiced at the origination end.
Our company is small and there are many checks and balances at every stop. Educated seasoned originators. Processors who know how to be a detective with their available resources and an underwriter who has seen it all.
Our processors have a comfortable open supervising staff which they or I can go to if they have suspicions.