This is a single-family/residential course.
Whether a loan applicant decides to commit fraud for property or for profit, the majority of misrepresentations can be tracked back to documentation found in the individual loan file. Misrepresentations may include fabricated or altered employment, income, and asset documentation. There may be debts that are not disclosed and sources of funds that are misrepresented. The occupancy intent of the property may also be false. These misrepresentations are known as "loan-level misrepresentations."
The mortgage file contains numerous forms and supporting documents. Quite often, these documents cross-reference each other, containing the same information. While the ease of access to desktop publishing software has made it simple to create fraudulent documents, one fact remains: since there are so many "data elements" within a loan file, it is very difficult for a fraud perpetrator to give consistent information throughout the entire file.
It is the initial review of the application and the cross-referencing of the supporting documents during the origination phase of the loan that exposes fraud. This loan-level document review should continue through the closing/escrow process and be reviewed again after closing by the lender's quality control department. It is often a good idea to start and end a review of a loan file with an overview of high-level risk factors. Look at the file as a whole, then analyze each individual document for red flags. Another way to approach this review is to think: "Does this loan make sense?" The loan file contains many opportunities to cross-reference information, and a high-level "big picture" review is a good place to start.
Mortgage Loan-Level Misrepresentation presents red flags within various documents in the loan file that may indicate the existence of loan-level misrepresentation. Areas of possible concern on the application, the sales contract, the credit report, income documentation, asset documentation, and the appraisal are described and discussed.
Sales Contract Review
Credit Report Concerns
Income Documentation Review
Asset Documentation Review
Seat time approximately one (1) hour.