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Welcome to Tommy's Quality Mortgage Services blog

By Tommy, on February 3rd, 2010

Welcome to Tommy’s Quality Mortgage Services Blog where you can see, ask questions, and comment on what’s happening in the Mortgage Industry.   Learn about/comment on trends, rules, changes, and services available to you.

February 3rd, 2010 | Category: Mortgage Compliance

1 comment to Welcome to Tommy’s Quality Mortgage Services Blog

  • Tommy
    February 10th, 2010 at 4:49 pm

    Welcome to my first blog posting. I hope mortgage professionals will participate to make this the best mortgage compliance blog out in the web.

    Being that my company, Quality Mortgage Services LLC, is a mortgage compliance company, we help many mortgage companies combat fraud. The first thing that a company must have in place is a commitment to combating mortgage fraud or what we call the “Attitude” which emanates from the company’s leadership and trickles down. When a company has the commitment to of zero tolerance for unscrupulous deals, all the team members will be on board to combat mortgage fraud. Many mortgage companies only take their Quality Control (QC) Plan as the tool to receive Federal Housing Administration (FHA), Fannie Mae or Freddie Mac approval. The QC Plan is more than a check the block for correspondent or mortgagee approval … it is the company’s written policy on quality production.

    Other mortgage companies have combined their Home Valuation Code of Conduct (HVCC) QC Plan and Red Flag Rules as appendices with their QC Plan. This a great process of using the Red Flag Rules as a pre-funding QC Plan to detect fraud prior to closing and using the HVCC QC Plan as a collateral QC Plan.

    Training is another way our clients are combating fraud. We audit a number of fraudulent mortgage files and we ask, “How did this get through?” We base this on training. Having a trained set of eyes that knows how to recognize fraud helps strengthen the quality of loans. Several months ago, we conducted training for a group of new QC auditors. After the initial test case, we gave the new auditors a set of live files to audit. We had not pre-screened the files prior to the assignment, and we discovered a number of digitally-altered documents of bank statements produced either by the loan officer or the borrower. The electronically-altered documents raised several red flags. The fax date stamp did not align with the Internet printed document. The fonts on the bank statement were not an exact fit. The kicker was when the withdrawals and deposits did not calculate with the available balance on the bank statement. The fraudster did not reconcile the statement. Why didn’t the processor or underwriter detect this? Fraud for housing is one of the most common types of fraud and rarely prosecuted. However, the mortgage company had internal problems and the company has deviant and/or untrained personnel who are gullible. There are a number of fraud detection course out there and many of them provide a certification at the conclusion of the course. Also, Campus MBA offers a number of course for underwriters and compliance personnel.

    Having qualified staff trained in mortgage fraud detection is the best way to combat mortgage fraud and having fraud detection tools as a resource is good as well, but too many mortgage professionals rely on them to a great degree than the people who have the ability to reach beyond data models into asymmetrical analysis.

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