Learn More - Click Here!

New Reply Thread Options
#2000300 - 03/06/15 06:09 PM Papers signed-found out borrower was fired
Anonymous
Unregistered

We have a situation where a loan was closed and it was found out that the borrower was let go from their job. The "verbal" (faxed) verification of employement was not received until after the closing. The loan is currently in rescission. Is there anything that can be done?

Return to Top Reply Quote Quick Reply Quick Quote
#2000309 - 03/06/15 06:31 PM Re: Papers signed-found out borrower was fired Anonymous
osucpa Offline
Diamond Poster
Joined: May 2011
Posts: 1,400
Check the demand clause in the promissory note. Review your procedures and determine why a follow up was not performed on the VOE.
Last edited by osucpa; 03/06/15 06:32 PM.
Return to Top Reply Quote Quick Reply Quick Quote
#2000318 - 03/06/15 06:48 PM Re: Papers signed-found out borrower was fired Anonymous
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,368
Galveston, TX
When did they lose their job? Before closing? Review your closing package, did the borrower sign anything that attested to the fact that no financial information had changed or did they sign a new completed application in which they attested to the accuracy of the information on the form?

In either case, cancel the transaction and send them an adverse action notice stating you where unable to verify the information they provided. Then get out your SAR for mortgage fraud.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top Reply Quote Quick Reply Quick Quote
#2000328 - 03/06/15 06:59 PM Re: Papers signed-found out borrower was fired Anonymous
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
My father: "As long as I still have the money I'm not wrong yet."
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top Reply Quote Quick Reply Quick Quote
#2000334 - 03/06/15 07:11 PM Re: Papers signed-found out borrower was fired Anonymous
Anonymous
Unregistered

The VOE was performed, unfortunately it was one that had to be sent out via fax yada yada yada and we couldn't have possibly waited to close until after the voe was sent back. He was terminated prior to the closing, knew about it, just didn't think it was an important enough detail to communicate to the lender. Swearing up and down that it won't matter because he does a lot of "side" jobs, etc....***FacePalm***

So yes, culpability on both sides, why the heck didn't we wait to close, and what is up with this borrower???

so can we just terminate it even though the docs are signed or should we strongly encourage him to rescind it?

Return to Top Reply Quote Quick Reply Quick Quote
#2000344 - 03/06/15 07:46 PM Re: Papers signed-found out borrower was fired Anonymous
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,368
Galveston, TX
The bank should just tell the borrower that the transaction has been cancelled as this is a case of mortgage loan fraud which "does matter" as it is a felony offense.

What you do about your ex-loan officer, I'll leave that up to you.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top Reply Quote Quick Reply Quick Quote
#2000351 - 03/06/15 08:05 PM Re: Papers signed-found out borrower was fired Anonymous
Anonymous
Unregistered

I apprecaite your answer rlcarey, but in this environment where the consumer is protected and the big bad bank is always out to get them, this approach is problematic. We let him sign the papers...what are we going to say?

Nine time out of ten is that language pointed out during a regular closing? Probably not. COuld the borrower go into court and show a few different ways where we weren't "fair" to them if we just terminate the loan at this point? Probably.

But then, conversley, now we have opened ourselves up, litigation-wise to not being able to prove ATR?

I just don't think it is as easy as cancelling the transaction...perhaps I am reading into it to much?

Return to Top Reply Quote Quick Reply Quick Quote
#2000358 - 03/06/15 08:13 PM Re: Papers signed-found out borrower was fired Anonymous
Dan Persfull Online
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,774
Bloomington, IN
You need to talk to your attorney since you are reluctant to take the advice given here.

But Randy is correct. If they signed an application at closing attesting everything is accurate on that application they committed fraud and regardless what you decide to do with the loan you need to file a SAR.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top Reply Quote Quick Reply Quick Quote
#2000363 - 03/06/15 08:26 PM Re: Papers signed-found out borrower was fired Anonymous
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,368
Galveston, TX
You are free to do what you want and Dan gave you the best advice of all - talk to your attorney.

But having stood in a front of a judge a few times and talked to many a client attorney, I would have no problem defending any action the bank took to unwind this transaction.

A client cannot commit fraud and then think they can sue the bank for some sort of damages - even in our screwed up world. If they did, I would tell them to bring it on as I picked-up the phone to the DAs office.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top Reply Quote Quick Reply Quick Quote
#2000376 - 03/06/15 08:56 PM Re: Papers signed-found out borrower was fired Anonymous
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Document all conversations with borrower that have taken place, date and time, phone or face to face.

Do not fund until you speak with legal counsel.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top Reply Quote Quick Reply Quick Quote
#2000429 - 03/07/15 12:05 AM Re: Papers signed-found out borrower was fired Anonymous
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,402
Florida
Agree with all posts and if you close and sell the loan on the secondary market, and they perform due-diligence on it, your bank will:
1 - be buying it back (with a penalty)
2 - be subject to scrutiny from the correspondent for every loan - forever.
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.

Return to Top Reply Quote Quick Reply Quick Quote
#2000467 - 03/09/15 02:57 AM Re: Papers signed-found out borrower was fired Anonymous
SMQ, CRCM Offline
Power Poster
SMQ, CRCM
Joined: Apr 2001
Posts: 4,828
Between the lines
Can he sue? Sure, anybody can sue, doesn't mean he has a good case, heck, he doesn't have a job and attorneys don't work for free.

The bank has an obligation to its depositors, shareholders, etc which is more important than some possible bad press from this guy. And it wouldn't be so bad if the public knows that they can't defraud the bank.
_________________________
NOLA is my Beach!

Return to Top Reply Quote Quick Reply Quick Quote
Quick Reply:
HTML is disabled
UBBCode is enabled




Moderator:  MagicCity, P*Q, Truffle Royale