I want to take this to the community for feedback.

We have a loan customer(husband) who modified a loan (for lower interest rate) with a 3rd party. We accepted and the loan funded. Customer has never been late and loan payments are current. Wife contacted us thru her attorney indicating that the husband forged her signature. She is not a guarantor. Husband and wife are going thru divorce now. Received a subpoena in connection with the divorce. He is now going to file for BK and she wants the house.

SAR or no SAR?
I say, SAR for the forgery with no amount right?

Did he forge her signature on the rescission notice?

Every SAR needs an amount (as one examiner so nicely told me) The amount of the SAR should be the amount of the loan.

And say suspected forgery. She could be lying now because of the divorce. Maybe he did, maybe he didn't.

She's named as a trustee in the family trust as part of the loan but not a guarantor. She claims the forgery occurred with the 3rd party when the docs were submitted.

I'm not a loan person, can you tell.

I agree.

Is the property owned by the couple or by the trust?

My $0.02: If you file - SAR for Consumer Loan Fraud, Item 34= the modified loan amount.

As others have indicated, you'll want to be clear as to exactly what was forged and the affect it had on your institution modifying the loan.

Property is owner occupied.

Name on the loan is:
John Doe, Trustee and Individual
Jane Doe, Trustee
Doe Family Trust (John & Jane as trustees)

How is the ownership listed on the title commitment? Is the property owned solely by the trust and John is added as an individual for some reason and Jane isn't?

As a side comment, we had a very similar situation 2 weeks ago - look for a power of attorney in the file. Our person claiming forgery had executed a perfectly beautiful and specific POA for this particular loan (before it went bad and she doesn't want to ante up). If the husband forged her signature on loan docs, who notarized it? Can you contact the notary to see what records were kept?

HMS Hawkii is right! Is there a notarized document? That's what I would be looking for.

"look for a power of attorney in the file."

If her signature was only as a trustee, a POA will not do you any good as it would not cover this transaction. Although the rest of the advice is worth pursuing.

This is a real work of art.

John hired a law firm/loan modification company and requested debt relief. The modification agreement(which included his and her signature) was not notarized by the 3rd party or us. The modification will most likely be rescinded. John already filed for BK this month. Payments are still current. Our legal counsel is now in contact directly with her lawyer.

I disagree to include the loan modification amount in section 34 since we are not at a loss.

Any insight?

If you know for certain it was a forgery on the application or any other loan document, you have loan fraud on your hands and the full amount of the loan should be reported on the SAR.

I think the first thing I would do is fired whoever accepted this document on behalf of the bank to begin with. If you think he forged the signature then file. If you don't, then don't. Any allegation by the wife is besides the point.

This is what SVP stated and i quote:
"We don’t notarize modifications as a general rule. This modification came through a law firm, so there is some fiduciary responsibility on their part as well."

The last statement doesn't sit well with me.
Thanks for the feedback guys.

Well, yes there is fiduciary responsibility with the law firm but that is to make the bank whole (probably after a protacted effort by the bank) and has nothing to do with any potential SAR or bad processes in general.

You might be interested in this recent case involving some forgeries. If the document does not appear on the screen at first, scroll down and you will see it.

http://leagle.com/xmlResult.aspx?xmldoc=In%20FCO%2020110316107.xml&docbase=CSLWAR3-2007-CURR

And there you go with protracted proceedings to try to collect!

Wow. I see several issues with that Retread - including requiring the wife to sign when she wasn't involved in the company.