FinCEN released an advisory last week to highlight suspicious activity with respect to mortgage loan fraud. The intention of the advisory is to provide financial institutions with information that may help them better assist law enforcement when filing suspicious activity reports (SARs) for potential mortgage loan fraud.
The advisory provides several types of mortgage loan fraud that may occur in a credit union. FinCEN is providing this information to help financial institutions better identify the activity that should be reported. The advisory also provides an extensive list of “red flags” that may transpire within a credit union and possibly warrant the filing of a SAR.
Finally, FinCEN provides guidance on filing SARs for mortgage loan fraud and requests that the narrative section of the SAR include the “NMLS Unique Identifier” for the financial institution and the MLO that may be reporting the suspicious activity. Here is what is stated by FinCEN:
“Financial institutions, when filing a SAR, are also requested, where available, to include in the narrative portion, the Conference of State Bank Supervisors’ (CSBS) National Mortgage Licensing System and Registry (NMLS) assigned “NMLS Unique Identifier.” As required by Section 1503 of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act), a NMLS unique identifier is permanently assigned to each state-licensed or federally registered mortgage loan originator (MLO), as well as each company, branch, and control person that maintains a single account in NMLS. The value of the NMLS Unique Identifier has been recognized by the Federal Housing Finance Agency (FHFA) and HUD. Both federal agencies require that any loan purchased or securitized by Fannie Mae and Freddie Mac, or submitted for insurance by the FHA, must include the NMLS Unique Identifier for the company and individual MLO that originated the mortgage loan.”
The information contained in this advisory would be an excellent addition to your ongoing BSA training program, especially for your mortgage loan originators. I urge you to take a look and make sure your staff is knowledgeable and prepared to report this type of activity.
Have a great week!