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