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#722181 - 04/26/07 11:13 AM Loan Fraud-SAR
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Hi,
I just found out that a customer stated/certified they were residing in a house which turns out they are renting.

I am considering filing a SAR as they lied on their app... would you?

I cannot see how anything could come of this, and that it would be a waste of time, for Fincen and us.

Comments?
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#722183 - 04/26/07 11:27 AM Re: Loan Fraud-SAR Retired DQ
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Devil Queen,
Great timing. It appears you are not talking about a mortgage loan, so I think the decision you have to make is whether you would have treated the application any differently if you had known the customer was a renter instead of a homeowner. If the false statement influenced your decision to make the loan, and you would not have made it if the borrower were truthful, then a SAR would probably be appropriate. Otherwise, I would say no SAR is needed.

After you read this article, you will probably want to look at any of your mortgage loans and file SARs on all of them.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aN2DPRuRs93M&refer=home
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#722191 - 04/26/07 12:10 PM Re: Loan Fraud-SAR Retread
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Thanks Retread... I thought that it would be pointless...
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#722199 - 04/26/07 12:24 PM Re: Loan Fraud-SAR Retired DQ
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Devil Queen,

Here is 18 USC 1014 which contains the language on "influencing" the credit decision.

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=browse_usc&docid=Cite:+18USC1014
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#722206 - 04/26/07 12:28 PM Re: Loan Fraud-SAR Retread
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Technically, my guess is they lied so as not to pay investment property interest rates...
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#722208 - 04/26/07 12:28 PM Re: Loan Fraud-SAR Retired DQ
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PS, they would have qualified anyway.
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#722221 - 04/26/07 12:51 PM Re: Loan Fraud-SAR Retired DQ
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Originally Posted By: Devil Queen
Technically, my guess is they lied so as not to pay investment property interest rates...


Those are the "liar's loans" that I really hate. Since we do full verification on all loans, it doesn't matter what the applicant says he or she earns; it only matters what we verify he or she earns. But when it comes to statements of intent to occupy, it's very difficult to prove the intent is not there.

Basically, in your gut you know they're lying, but you can't prove it. And you know they're lying just to get the owner-occupied rate.
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#722231 - 04/26/07 01:04 PM Re: Loan Fraud-SAR Sinatra Fan
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I suppose the "I changed my mind after closing..." story would work, eh?
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#722250 - 04/26/07 01:23 PM Re: Loan Fraud-SAR Retired DQ
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No loan for you!! Move along!

(woah, I think I'm mixing threads)
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#722263 - 04/26/07 01:37 PM Re: Loan Fraud-SAR Retired DQ
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Quote:
a customer stated/certified they were residing in a house which turns out they are renting


DQ: Did they say they owned the house or did they just say they were "residing" in it? Residing just means they live there.

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#722265 - 04/26/07 01:38 PM Re: Loan Fraud-SAR Ted Dreyer
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No, I am sorry if I wasn't clear. They purchased a property, declared they were going to live in it, and turned around and rented it.
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#727322 - 05/05/07 03:36 PM Re: Loan Fraud-SAR Retired DQ
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Typically you require a larger down payment for mortgage loans to purchase investment property (e.g. 20% vs. 5%). Or perhaps your bank charges a higher rate for non-owner occupied loans. If the customer benefited from a higher LTV (lower down pmt) or lower interest rate due to their false statement, in my opinion that warrants a SAR.

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#727327 - 05/05/07 11:11 PM Re: Loan Fraud-SAR Retired DQ
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One way of verify (found out through the same issue!) look at homeowners insurance they furnish - does it show for rental property?

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