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FinCEN SARs can help detect mortgage-help scams
WASHINGTON (4/13/09)--The Financial Crimes Enforcement Network (FinCEN) is asking credit unions and other Suspicious Activity Report (SAR) filers to help identify schemers taking advantage of homeowners with mortgage difficulties, so law enforcement can crack down. FinCEN issued guidance last week on potential indicators that financial institutions can be on the look out for regarding loan-modification or foreclosure-rescue scams. On February 10th, U.S. Treasury Secretary Timothy Geithner outlined Treasury's comprehensive Financial Stability Plan, which includes a Home Affordable Refinance Program and a Home Affordable Modification Program. FinCEN said that with the introduction of these new programs, more homeowners facing difficulty meeting the mortgage obligations have the opportunity to modify their mortgages and avoid foreclosure. However, along with the positive comes a growing negative, FinCEN warned, as growing numbers of unscrupulous persons or companies could attempt to abuse these loan modification and foreclosure prevention programs. FinCEN, in its recent SARs guidance, asks financial institutions to be on the look out for such things as a statement by a homeowner that s/he has been making payments to a party other than the mortgage holder or servicer. If a homeowner says that s/he has hired a third party, perhaps advertised as a "foreclosure specialist" or "mortgage specialist," it may be suspicious, FinCEN said, if the homeowner indicates that the third party did such things as:
* Charge up-front fees for foreclosure rescue or loan modification services; * Accept up-front payment only by official check, cashier's check or wire transfer; * Use aggressive tactics to seek out the homeowner by telephone, e-mail, mail or in person; * Pressure the homeowner to sign paperwork he/she didn't have an opportunity to read thoroughly or that he/she didn't understand; * “Guarantee” to save the home from foreclosure or stop the foreclosure process "no matter what;" * Claims the process will be quick with relatively little information and paperwork required from the homeowner; and more.
FinCEN said it will continue to monitor Suspicious Activity Reports that identify mortgage loan fraud, and specifically loan modification and foreclosure rescue scams, in order to provide future analysis and ways to mitigate losses to financial institutions and consumers. FinCEN will issue further advisories on this issue “as appropriate” Use the resource link below to read more about the FinCEN SAR guidance.
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