In prepared remarks to the American Association of Mortgage Regulators, FinCEN Director, James H. Freis, Jr., announced that FinCEN issued an advisory to assist financial institutions—specifically non-bank residential mortgage lenders and originators—in filing more useful Suspicious Activity Reports related to mortgage loan fraud. Director Freis noted that FinCEN issued the advisory to facilitate compliance with FinCEN's regulations requiring nonbank RMLOs to establish anti-money laundering programs and file SARs. The advisory identified the types of mortgage loan fraud generally reported in SARs to help financial institutions identify illicit activities. The types of mortgage loan fraud identified include:
- Occupancy fraud
- Income fraud
- Appraisal fraud
- Employment fraud
- Liability fraud
- Debt elimination schemes
- Foreclosure rescue fraud
- Identity theft
- Home equity conversion loan fraud
The advisory also described potential red flag indicators of illicit activity such as language in a short sale contract permitting resale promptly and past misrepresentations.
Goodwin Procter LLP is one of the nation's leading law firms, with a team of 700 attorneys and offices in Boston, Los Angeles, New York, San Diego, San Francisco and Washington, D.C. The firm combines in-depth legal knowledge with practical business experience to deliver innovative solutions to complex legal problems. We provide litigation, corporate law and real estate services to clients ranging from start-up companies to Fortune 500 multinationals, with a focus on matters involving private equity, technology companies, real estate capital markets, financial services, intellectual property and products liability.
This article, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin Procter LLP or its attorneys. © 2012 Goodwin Procter LLP. All rights reserved.
