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#2239117 - 07/06/20 06:01 PM Adverse action - prior mortgage fraud?
SmallBank3 Offline
Member
Joined: Nov 2019
Posts: 58
We have had a commercial loan applicant requesting $1 million+ for a development project. Upon a cursory negative news search, it was discovered that our applicant had been convicted, with four other defendants, for an elaborate $20 million dollar local mortgage fraud scheme. Our applicant individually was responsible for mortgage lenders’ losses of $1 million dollars. This information is from an FBI Press Release. My question is, in an adverse action notice, what would we cite as the denial reason? I’ve never come across this so am struggling with it a bit. I reviewed the lending manuals we have and nothing seems to apply – I really appreciate any insight you have on this situation!

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#2239119 - 07/06/20 06:50 PM Re: Adverse action - prior mortgage fraud? SmallBank3
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Why give him a reason in the adverse action notice?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2239121 - 07/06/20 07:01 PM Re: Adverse action - prior mortgage fraud? SmallBank3
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Or just tell him the truth "Previously convicted of mortgage loan fraud", as long as you are sure it is true. What the heck is he going to do about it?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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