FINCEN MAKES NONBANKS COMPLY WITH REPORTING REQUIREMENTS; THIS INCLUDES ALL MORTGAGE LOAN ORIGINATORS, BROKERS AND LENDERS FACTS - Over the last 20 years you have all heard me speak of this agency. All federal financial institutions have to file Suspicious Activity Reports with it. The filer may not reveal to anyone this has been done under criminal penalty. The filer does it in good faith and does not even have to be right. It reaches the desks of the FBI, Secret Service and local prosecutors. The agent n charge for the local FBI office decides which of the reports will be investigated. Now nonbanks must comply. The Financial Crimes Enforcement Network finalized regulations on Feb. 7 by which non-bank residential mortgage lenders and originators will have to follow the same rules as other financial institutions.
FinCEN will require non-bank mortgage lenders and originators to establish anti-money laundering programs and to file suspicious activity reports in order to help law enforcement agencies detect any possible fraud within their businesses. This means the reporters only have to be suspicious. They do not have to be right.
According to FinCEN, the new regulations will help mitigate some of the risks and minimize some of the vulnerabilities that criminals have exploited in the non-bank residential mortgage sector. FinCEN said scams that fraudsters have used against non-banks include false statements, the use of straw buyers, fraudulent flipping, flopping and identity theft.
The final rule will go into effect 60 days after publication in the Federal Register and compliance begins for non-banks six months after it is published. So get prepared. (nmn2712)
MORAL
This wears an ugly hat because you do not have any options but to file.
HUD/FHA CHANGES COMPARE RATIO VALUES BY NOT INCLUDING STREAMLINE REFINANCING
FACTS
FHA has changed the way in which Streamline Refinance loans are used in the Neighborhood Watch System. Streamline Refinances will be removed from the public compare ratio in Neighborhood Watch. Lenders will still be able to view their own traditional compare ratio with streamlines included. FHA will modify its execution of the Credit Watch Termination Initiative to correspond to the changes noted. (wbrod2812)
MORAL
I have warned everyone in HUD programs to watch the Compare Ratio in Neighborhood Watch on a regular monthly basis. Failure to do so can trigger an audit and possible loss of the DE endorsement.
ORANGE COUNTY DA ACTIVATES FRAUD UNIT WITH THE HELP OF THE REAL ESTATE FRAUD ADVISORY BOARD
FACTS
As if the FBI, the Attorney General and the HUD Special Agents are not enough, there is now Elizabeth Henderson, an assistant Orange County District Attorney that is head of the major fraud unit and who has the help of the Real Estate Fraud Advisory Board.
Henderson and the board meet every three months at the District Attorney's office to talk about new scams that may be occurring and how to catch the people doing them. There are two attorneys and three investigators that work full time in real estate fraud and currently there are 37 active cases where charges have already been filed.
What is interesting about the Real Estate Advisory Board? Of the 20 people, most are real estate licensees. Still at it according to the D.A.'s office are loan modification scams and short sale frauds. (pcrenewsdpp3621112)
MORAL
If someone is not sure whether a new business venture is legal, it is a lot cheaper to consult with your real estate lawyer for one hour than it is to pay the same lawyer to defend you in a criminal prosecution. You also sleep better.
THREE NORTHERN CALIFORNIA REAL ESTATE INVESTORS AGREE TO PLEAD GUILTY FOR BID RIGGING AT FORECLOSURE SALES
FACTS
On Feb. 9, three Northern California real estate investors agreed to plead guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California. To date, 20 individuals have agreed to plead guilty.
Charges were filed in U.S. District Court for the Northern District of California in Oakland, Calif., against Barry Heisner, Dominic Leung and Hilton Wong.
Between August 2008 and January 2011, the three conspired with others not to big against one another at public real estate foreclosure auctions. Instead, the investors designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County.
Heisner, Leung and Wong also were charged with conspiracies to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions took place at or near the courthouse steps where the public auctions were held. A forfeiture allegation was also included in the charges against Heisner.
