E-sign Act and Mortgage Fraud

Consumer must be given what under the the E-sign Act?

A paper option that they can request the right to withdraw their consent Description of procedures to withdraw consent Description of procedures to update information List of hardware/software requirements

Penalties of bank fraud:

Fines of not more than $1 million Imprisonment of no more than 30 years

FERA

Fraud Enforcement and Recovery Act Enacted to facilitate the prosecution of those who commit mortgage fraud and to increase the financial resources that are available to investigate and prosecute fraud cases

Fraud for Housing

Fraud that is done by borrowers who's motivation is to secure housing Misrepresentation Employment history Credit history Intention to occupy a property as a primary residence Income

Penalties of mail fraud:

$1 million and 20 years in prison If the violation affects a financial institution: 30 years in prison

Purpose of the E-sign Act

Address the validity of documents, records, and signatures that are in electronic form

Predatory Lending

Borrowers are encouraged to purchase homes based on inflated appraisals

Fraud for profit

Involves the conspiratorial involvement of unscrupulous individuals coming from all areas of mortgage, fraud that is done for financial gain

Liar Loan

Lenders are willing to fund low income documentation and no documentation loans, borrowers took advantage and inflated their income and other qualifications

Techniques for detecting fraud:

Loan application red flags Credit report red flags Employment and income red flags Personal identifying info red flags Appraisal red flags