Privacy Protection/ Do-Not-Call And Mortgage Fraud Laws

Penalties for Mail Fraud:

• Fines and/or imprisonment up to 20 years • Fine up to $1 million and/or imprisonment up to 30 years if the violation affects a financial institution

o Fraud Enforcement and Recovery Act enacted to:

Facilitate the prosecution of those who commit mortgage fraud Increase the financial resources that are available to investigate and prosecute fraud cases Specifies that defrauding a financial institution includes a mortgage lending business

o Money Laundering

Financial transactions that are used to distance illegally obtained funds from their original criminal source Penalties: • Fine of $500,000 or twice the value of the property involved, whichever is greater, and/or imprisonment up to 20 year

o Conspiracy

General conspiracy statute that protects the government from fraud and other offenses • Applies to fraudulent actions against government agencies such as HUD and the Federal Housing Administration

o Bank Fraud

Use of a fraudulent scheme to unlawfully obtain money or property from a federally-insured financial institution Penalties: • Fines up to $1 million and/or imprisonment up to 30 years

o Fraud in Connection with Identification Documents

Use of false identification documents, including the use of stolen personal information 3 levels of penalties, depending on the nature of the act • Imprisonment up to 15 years

• The Do-Not-Call Implementation Act authorizes implementation of the .......

Do-Not-Call Registry

Who covers calls made within the same state?

FCC

Who covers interstate calls?

FTC

if the consumers inquire to a LO about a loan or opportunity, they may call them......

Permissible to contact consumers for 3 months following a relationship based on an inquiry by the consumer

• Mortgage fraud:

a crime involving a material misstatement, misrepresentation, or omission in relation to a loan transaction in which the person carrying out the crime intends for another person to rely on it

How often must businesses access the registry?

every 31 days Intended to ensure call lists are updated

Recordkeeping How long must mortgage professionals engaged in telemarketing maintain records of all telemarketing activities?

for 24 months from the date the materials were produced

What is Fraud for Profit?

o "Industry insider fraud" o Involves multiple individuals from various areas of the mortgage industry o 80% of all reported fraud losses Frauds for profit schemes, on the other hand, typically involve a person or a group of people that abuse the system for financial gain. These persons are often well versed in mortgage finance and know how to exploit the system at the expense of lenders, taxpayers, consumers and communities."

Fraud for Housing

o Borrower misrepresents employment history, credit history, intention to occupy a property as a primary residence, or income in order to improve his/her chances of securing a mortgage Fraud for property occurs, typically, when fraud is committed so that a home buyer can purchase a house for personal use. Historically, such fraud carries a lower financial risk to lenders because the fraud is a one-time occurrence on a loan the buyer intends to repay.

What are Exceptions to the Do-Not-Call Provisions?

o Established business relationship: a relationship between a seller 18 months prior to a sales call

• Requirements of the Do-Not-Call Provisions

o Must disclose: The identity of the caller The fact that the purpose of the call is to sell goods or services The nature of the good/services being sold Assurance that no purchase or payment is required to participate in any type of promotion

• Prohibitions of the Telemarketing Sales Rule

o Use of threats, intimidation, or profane language o Placing calls to consumers before 8:00 a.m. or after 9:00 p.m. o Making false or misleading statements o Requiring payment of a fee in advance of obtaining a loan o Charging a consumer for goods or services without consent o Failing to transmit a phone number so that it may be read by Caller ID o Calling a consumer listed on the Do-Not-Call Registry

• FBI, HUD, and IRS conduct investigations and make referrals to the>>>

the Department of Justice

What is the purpose of the Do-not-call?

• Allows consumers to restrict unwanted sales calls

o False Statements to a Financial Institution

• Fine of up to $1 million and/or imprisonment up to 30 years