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Mortgage Bankers Association National Fraud Issues Conference 2010

By Tommy, on April 28th, 2010

This conference was better than what I thought it would be.  I had been to so many mortgage fraud conferences and siminars, I thought it would be a repeat of the same thing I have heard year after year.  I must give credit to those who made this conference a success especially the committees who brought the expert panelist together.  I was excited to see the high level of speakers that participated in the different panels. In no particular order:

Martin Abad, Associate Director Fraud Investigations at Freddie Mac

John D. Arterberry, Executive Deputy Chief, Fraud Section, Criminal Division

Vicki Bott, Assistant Secretary of Single Family Housing Programs, US Department of Housing Urban Development

Jenny Brawley, Associate Director of Mortgage Fraud Investigations, Fannie Mae

Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation

Christopher R. Sharpley, Deputy Special Inspector General for Troubled Asset Relief Program, Investigation Division

Some things that I learned:

*HUD has approximately 300 auditors and 300 special agents

*60% of HUD case load is residential fraud investigations

*HUD performs undercover work because by the time HUD get the investigation a lot of time has passed and the players have moved on and it is difficult to find therefore, working current leads while mortgage fraud activities are being repeated in order to catch fraudster in the act.

*The DOJ works closely with many agencies and shares data.  The DOJ has 3000 in its case load. (There is no way the FBI can handle this amount of volume and prosecute this all.  Many will get away with it.)

(I found out the agencies are extremely limited in funds and it was my impression time was on the fruaster’s side.  For example HUD had approved by congress $25M over a year ago for modernization but none of it had been appropriated.   Therefore, HUD has not been able to modernize to the level of the current industry.)

*Risk Management includes three areas:

-Culture – Get away from PRODUCTION, PRODUCTION, PRODUCTION… change culture to what our parents and churches taught: Honesty, Integrity, and Justice. Must build the culture so the actions flow from moral beliefs and the actions produce results

-Education/Training – evolving and changing

-Systems/Processes – Pattern deviations trigger managers. (for example; loan officer has normal production and a steady increase beyond the other is a deviation that triggers the systems and managers to check potential problems.  “Too good to be real.”)

*It is your human resources that is your best line of defense.  Trust your gut instinct.

*The penalty for economic crimes doesn’t get the time.

 *DOJ could do better to provide feedback to the public the importance of SAR and the outcomes of its intelligence models

*No one at the conference could place a dollar amount on the affect mortgage fraud has had on the economy

*It takes 2 to 3 years for HECM fraud to surface

*Everyone has difficulty verifing occupancy of HUD owned homes

*$700 Billion FDIC had in insured bank failures

*Chicago had the largest hit this week with bank failures

*128 banks that failed in 2009 were FDIC banks

*Banks fail because of poorly managed or bad assets

There were other sessions that were very informative and that covered many other topics related to the fraud issues in the mortgage industry.  Unfortunately it is too much for me to provide in this blog.

April 28th, 2010 | Category: Quality Mortgage Services Events

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