Compliance

Fraud risk control is commonly recognized as an effective way to avoid loan buybacks.Avivah Litan, vice president and analyst at Gartner research firm, says lenders who want to remain competitive in fraud management are also aware that they “cannot continue doing business as usual.”

In an era of low interest rates, weak loan demand and unprecedented efforts by the Federal Reserve Board to pump liquidity into the economy, the demand for Federal Home Loan Bank advances has plummeted to a 10-year low, raising questions about the system's future as the government weighs a redesign of the housing finance sector.

LEHMAN BROS., which failed in 2008 while holding bad real estate loans, on Nov. 15, filed suit against NATIONFIRST LENDING INC., an Irvine mortgage company for allegedly misrepresenting the strength of loans it sold to the Wall Street firm. The lawsuit, filed in federal court in Los Angeles, alleges that Nationsfirst Lending Inc. misrepresented the identities of borrowers, the value and condition of property securing the loans and the validity of loan documents. NATIONSFIRST is listed as a suspended corporation on the California Secretary of State website.

New federal regulation is attempting to make it as difficult as possible for fraudsters to deceive homeowners. The Federal Trade Commission has issued a new rule designed to ban the collection of fees by mortgage loan modification and other foreclosure rescue service providers until homeowners receive a written offer “that they decide is acceptable” from their lender or servicer.

The Oregon attorney general has filed a lawsuit accusing American Team Mortgage, Mission Viejo, for repeatedly violating the state's Unfair Trade Practices Act and Mortgage Rescue Fraud Protection Act.

The National Credit Union Administration is exploring legal remedies against firms that sold faulty mortgage backed securities that later played a key role in the failure of a handful of corporate CUs.

ILLINOIS BONDING REQUIREMENTS increase effective Dec. 31. The rate is $25,000 to $150,000 depending on the total loan officer volume. (I hope you have a lot of volume)Surety Bond Volume Requirements:

Refinancing fraud is on the rise.An updated CoreLogic 2010 Mortgage Fraud Trends Report finds that while overall mortgage fraud has increased by 20% compared to its lowest level in 2009, refinance fraud increased by 30%.

The wave of short sales expected to enter the market due to newly intensified government and industry efforts to avoid foreclosures is increasing the odds for short sale fraud risk.

As you think of the suspense-filled spy movies in which the hero must defuse a bomb to save the city, you can hear the familiar “tick, tick, tick” of the bomb’s time clock. With ninja-like precision the hero cuts the yellow wire, or maybe the red wire, just in time to stop the clock, neutralize the bomb, and save the day.

Put-backs of defective mortgages are accelerating and the Federal Reserve Board is growing more concerned about the potential risks to the banking system.

The Federal Trade Commission has issued a new rule banning the collection of fees by mortgage loan modification and other foreclosure rescue service providers until homeowners receive a written offer from their lender or servicer “that they decide is acceptable”.

BankAtlantic Bancorp Inc., Fort Lauderdale, Fla., has been ordered by a jury to pay $2.41 per share to common stockholders in a class action lawsuit filed after the company's earnings were battered by problems with real estate.

An updated CoreLogic Mortgage Fraud Trends Report finds that while overall mortgage fraud has increased by 20% since fraud hit its lowest level in 2009, refinance fraud saw an even higher increase of 30%.

In their first week back since the midterm elections, lawmakers are taking up the robo-signing scandal in multiple venues.

On Nov 5, ARTHUR GONZALES DIAZ, an Anaheim resident was arraigned on seven felony counts of grand theft and one misdemeanor count of engaging in business as a real estate broker without a license. He is accused of targeting and defrauding Hispanic victims of more than $87,000 in bogus real estate deals. Diaz faces a maximum sentence of eight years in state prison.

Flagstar Bank has closed on the sale of a $474 million portfolio of non-insured non-performing residential first mortgages.

The government is proceeding with a vengeance in this attorney's opinion to prosecute fraud and to recover money where failed banks still had loans in their portfolio at the time of the failure. The FDIC “letters of inquiry,” subpoenas and lawsuits are just starting and I believe will escalate. The reason for this belief? The government is using private law firms for the most part in chasing the problems. You will note the letters indicate the delegation of authority if you have received one.

A Grapevine user discusses a particular loan scenario where a mother wants to save her daughter from going into foreclosure. Find out more here.…

A New Jersey woman has pleaded guilty to conspiracy to commit wire fraud in connection with her operation of a $45 million Ponzi scheme that fraudulently solicited investments in real estate from more than 20 New York and New Jersey investors, according to Preet Bharara, U.S. attorney for the Southern District of New York.