The Financial Crimes Enforcement Network finalized regulations today 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.
“Suspicious activity reports are a critical source of information to law enforcement and regulatory agencies in their investigation and prosecution of mortgage fraud and a wide range of other financial crimes,” said James Freis, Jr., director of FinCEN, Vienna, Va.
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.
