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Mortgage Loan Fraud

According to FinCEN, mortgage loan fraud is on the rise. FinCEN's analysis of SAR filings shows a distinct trend in mortgage loan fraud. The most common trick to watch for is a mortgage loan involving two states, with the loan being made in one state but the related fraud occurring in another state.

Typical elements in mortgage loan fraud involve misrepresentation of income or employment, providing fraudulent tax returns, forged documents, misrepresentation of the buyer or using a straw buyer, and asset fraud.

The entire scope of your customer identification is one of your most effective tools to prevent falling victim to such fraud. Identify the customer and make sure the entire situation makes sense - all of it.

Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 15, 12/05

First published on 12/01/2005

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