Together, Reducing Fraud Worldwide
7:30 a.m. - 8:00 a.m.
Registration - Breakfast Pastries
8:00 a.m. - 9:20 a.m.
Introduction and Background
The mortgage industry has evolved through the years and consistently faces new challenges in the fight against mortgage fraud. In this opening session, you will be introduced to a short history of the mortgage industry, the secondary market influence on the industry today, factors that affect mortgage fraud, the scope and industry reaction to the mortgage fraud problem and predictions for the future in combating mortgage fraud.
Red Flags in Capacity Documents
Lenders rely on the borrower’s capacity or ability to repay a loan. To gauge capacity, a lender will consider a borrower’s employment, income, assets and debts. In this session, you will learn the common ways capacity documentation is misrepresented to mislead lenders.
9:20 a.m. - 9:35 a.m.
9:35 a.m. - 10:55 a.m.
The Players, Process and Paper – Lifecycle of a Mortgage Loan
During the life of a mortgage loan, from origination to resolution, there are numerous players involved, each with specific duties and responsibilities. Each player can also orchestrate, facilitate, or collude to commit mortgage fraud. In order to prevent, detect and investigate mortgage fraud, you must first understand this process. In this session, you will be introduced to the various players involved in the life of a mortgage loan, their duties and responsibilities and how each can exploit the process in order to commit mortgage fraud. We will also meet the two borrowers whose loans will be used in the case study.
Red Flags in the Closing Documents The closing of the transaction is the culmination of the fraud scheme. This closing transaction is where the lender provides the funds based on material misrepresentations and title is conveyed to the borrower. In this session, you will learn how to read key closing documents, such as the lender’s closing instructions, the HUD-1 and the disbursement summary to look for suspicious transactions and red flags.
10:55 a.m. - 11:10 a.m.
11:10 a.m. - 12:30 p.m.
Mortgage Fraud – Emerging Schemes
There are three distinct types of mortgage fraud, each with a different goal or objective: fraud for profit, fraud for property and fraud for criminal enterprise. In this session, you will learn about the different fraud schemes utilized today along with the red flags to detect these schemes. You will also be introduced to the common misrepresentations used in the commission of these fraud schemes.
Prevention, Detection and Investigation
The key to combating mortgage fraud is prevention and early detection. In this session, you will learn best practices for preventative controls to keep mortgage fraud from occurring and pre-closing detection measures. This session also discusses post-closing detection techniques and investigative techniques and steps to test, prove, and document the red flags identified.
12:30 p.m. - 1:30 p.m.
Lunch on your own
1:30 p.m. - 2:50 p.m.
Red Flags of Credit Lenders rely on a borrower’s credit when making an underwriting decision. Credit is a common misrepresentation to mislead the lender that the borrower has the ability to repay. In this session, you will learn about credit scores and the ways that a borrower’s credit can be misrepresented.
Legal Aspects and Remedies
The goal of most mortgage fraud investigations is to prosecute, recover funds, prevent a repurchase or investigate an insurance claim. In this session, you will learn about the different federal and state legal remedies available for criminal prosecution or civil litigation. You will also learn about regulatory and licensing remedies. You will learn tips on packaging and referring a mortgage fraud case to state and federal prosecutors. You will also learn about recent state criminal statutes that make mortgage fraud a felony.
2:50 p.m. - 3:05 p.m.
3:05 p.m. - 4:25 p.m.
Red Flags of Collateral Lenders rely on sufficient collateral when making an underwriting decision. In assessing collateral, a lender will look at the type of the property, the usage of the property and the value of the property in order to ensure that the lender will be adequately secured should the borrower default on the loan. In this session, you will learn common ways that values are inflated to cause a lender to approve loans for more than a property is worth. You will also learn common misrepresentations made about the property’s type and usage.
In this final session, we will utilize investigation techniques and apply them to the case examples. The investigation will culminate in the interview of the loan parties to determine the scheme, the misrepresentations and the culpable parties. You will leave this course with the training that you will need to keep up with the latest fraud schemes, institute preventative controls, and investigate a mortgage fraud to resolution.
© 2014 Association of Certified Fraud Examiners, Inc. All rights reserved.