We recently received a confirmation request from a mortgage company that had made a loan to one of our customers. The request included a "copy" of our customer's checking account statement and asked for confirmation of the accuracy of the statement. When we compared the "copy" to our records, there were significant differences. It appears our customer may have provided "inaccurate" information in order to get a mortgage. What are our obligations to the mortgage company? Should we file a SAR?

Thanks in advance for any help you may offer.

How did your customer get a copy of a statement that was different from what you had on file? Forgive me for not having a criminal mind, but is there a way to do that?

White-out, retype, photocopy....

Sorry, couldn't resist.

I wouldn't even confirm that the person banked with you at all if a signed authorization to release information about his accounts (from your customer) wasn't included with the "copy" of the statement sent to you.

I agree with Randy. Do not respond unless you received a written authorization. Verifications like this are done before a loan is made and sometimes after settlement in a loan review process. In both cases, a signed customer authorization for the release of information should have been sent.

I do not believe you have any obligation to respond to this type of confirmation. As this request was received after the loan was made, it appears to be a request for loan review purposes. Not responding to a loan review request has less ramifications for you because this request type does not stem from the desire of your customer to obtain a loan. In other words, your deposit customer could probably care less if you respond.

However, if you care about professional courtesy and you are sure that any authorization is accurate, you could respond by noting the discrepancy. This will cause the mortgage company to contact the applicant for an explanation. If the discrepancy is not satisfactorily resolved, the mortgage company may file a regulatory report or call the loan if the discrepancy is serious.

If there was no attempt to defraud your bank, I do not believe you have a reason to file an SAR. Also, you should be very careful about disclosing any concerns to outsiders that could tarnish the customer’s image. You could wind up on the wrong side of a lawsuit.

Disclaimer: My opinion above is not intended as legal advice because I am not a lawyer. If I were, I would be charging for my thoughts at the standard rate of $1k per hour (after additional fees for phone calls, ink for my pen, and pencil sharpeners). My ramblings are certainly not the opinion of my employer and, if you ask my wife, not worth 2¢.

This request is probably from a QC audit and the response is very beneficial to the entire lending community. If you did not receive a copy of an authorization for release of the information, call the mortgage company and ask them for one.

Responses to QC audits help to cut down on fraud in lending. Now that people have use of high quality laser printers and scanners, etc, making changes to bank statements is not that difficult of a task. QC departments catch these types of fraud daily. If you read Daily Mortgage News, they have an ongoing fraud list, and it is getting longer and longer. Fraud costs us all money. When your bank loses money on fraud, your bonus or salary increase is less. It takes a little bit of time, but do the right thing.

You are exactly right about how easy it is to modify bank statements. Unfortunately I've even see bank employees modify customer stmts to cover up their own transgressions.

Gotta tell ya Doug, love the disclaimer!

Thank you, David. I’ve been trying to convince my wife for 14 years that my opinions are worth 2¢. I’ve got her up to 1.5¢ and am hoping to get over that hump within 2 years. After this hurdle, I only need to convince a handful of managers. I figure that if I can get that far, I might study and sit for the bar. Wow! Think of all the money I would make talkin’ and fillin’ up the ink well for my genuine Colonial Williamsburg quill pen!

Of course, by the time I convince my wife and every manager that walks through the door, I may have to just settle for sitting at the bar.

Thanks to all for your help. We're probably going to respond; however, things have become a bit more complicated now. We did receive (via fax with the confirmation request) a signed authorization form, but the signature doesn't really match the one we have on file for our customer. It's close, but in this case we want to be very sure. We're considering contacting our customer but, under the circumstances, we're just not sure. On the one hand, it could be our customer providing "inaccurate" information in order to get a mortgage loan; on the other hand, it could be that our customer's identity has been stolen and she knows nothing about it.

Any words of wisdom?

What about calling the customer?? Maybe they could shed some light on the subject. Maybe???

What about possibly calling the company who has made the request to find out what procedure they used to identify the customer? Did they look at her license? Are they confident that they are dealing with the correct person? That won't necessarily mean you will be confident, but it might be worth checking to see if they have a verification process in place. Signatures can be hard to match one on one because they can vary so much and for so many reasons, this company may have some info that will give you a little more to go on. Just a thought.

Barbara Piccotti:

You've started a very interesting thread -- worth much more than two cents. But I believe that all of you are making this more complicated than it needs to be . . .

Obtaining a loan from a federally insured financial institution (the mortgage company may qualify) is a federal felony -- but it's not necessarily one that the FBI would pursue. If this event involves an identity theft, your local law enforcement agency is likely working several cases involving the same victim, simultaneously. But, because you're only talking with the mortgage company, the agency may never know about your event -- and yours may be the key that solves the others.

I suggest that you contact your local financial crime detective and ask if he/she is currently working an investigation involving (your customer's name here). I used to get some of my most significant cases this way -- from just a telephone call about a CURRENT investigation. While you don't have enough information yet to know if you need to file a SAR, you might gather it during the next couple of days.

If you are concerned about the signature, you could also get a copy of the recorded mortgage. It is public record and would have the signature notarized. That would confirm that it is your customer.