Income fraud
This is one of the most common mortgage fraud schemes, says the American Land Title Association (ALTA). Income fraud is simply when a buyer lies about their level of income and debt to obtain a mortgage loan. They may inflate their salary, make up an employer or fabricate pay stubs.
The three most common issues reported to the CFPB related to credit reporting were incorrect information on credit reports (30.8% of complaints), improper use of credit reports (27.6%), and problems with a credit reporting agency's investigation into a complaint (21.9%).
Examples of Lending Discrimination
Providing a different customer service experience to mortgage applicants depending on their race, color, religion, sex (including gender identity and sexual orientation), familial status, national origin or disability.
HUD takes strong action to hold the mortgage industry accountable for the products and services they provide to families who are either seeking to buy or rent a home or struggling to keep the home they have. For example, HUD constantly monitors lenders who are approved by the Federal Housing Administration (FHA).
Mortgage Servicing Rights (MSRs) are assets on the books of the failed institution with responsibilities to administer and manage mortgage loan portfolios owned by others—typically single-family residential loans—in exchange for a servicing fee.
Types of Lending Discrimination
Overt evidence of disparate treatment; • Comparative evidence of disparate treatment; and • Evidence of disparate impact.
Negligence: Breach of the lender duty of care that leads to damage such as financial trouble for the borrower.
The Red Flags Rule requires specified firms to create a written Identity Theft Prevention Program (ITPP) designed to identify, detect and respond to “red flags”—patterns, practices or specific activities—that could indicate identity theft.
Consistent with applicable law, we securely share complaints with other state and federal agencies to, among other things, facilitate: supervision activities, enforcement activities, and. monitor the market for consumer financial products and services.
Wells Fargo Bank, Bank of America, and JPMorgan Chase were the most complained-about banks in the United States, as measured by total number of complaints. They are also the nation's three largest banks based on the size of their deposits.
An instrumental complaint is a complaint made to a person or organization that could take some action and bring about a specific remedy. An expressive complaint is a complaint made for the purpose of expressing feelings, without any realistic chance of anything being done.
Character, capital, capacity, and collateral – purpose isn't tied entirely to any one of the four Cs of credit worthiness. If your business is lacking in one of the Cs, it doesn't mean it has a weak purpose, and vice versa.
A straw buyer is a person who buys something on behalf of another person who has a reason (legitimate or not) why they can't make the purchase themselves. A straw buyer may be a willing participant in the arrangement, or they may be tricked into a fraudulent straw purchasing scheme.
The Lot or Block number could be wrong, the name of the subdivision could be misspelled, or the legal description for a completely different property could be accidentally placed on the mortgage. Banks solve problems or typos in the legal description through Reformation.
The Fair Debt Collection Practices Act (FDCPA) prohibits mortgage lenders and servicers from using abusive, unfair, or deceptive practices in consumer loans. The FDCPA applies to making and processing mortgage loans so that you can sue your lender or servicer in federal court.
The Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) protect consumers by prohibiting unfair and discriminatory practices.
This fiduciary duty includes a requirement that the mortgage broker place the economic interest of the borrower ahead of his or her own economic interest.
Students classify those characteristics based on the three C's of credit (capacity, character, and collateral), assess the riskiness of lending to that individual based on these characteristics, and then decide whether or not to approve or deny the loan request.
Fair lending prohibits lenders from considering your race, color, national origin, religion, sex, familial status, or disability when applying for residential mortgage loans.
These are loans offered by government entities like the U.S. Small Business Administration (SBA) and lenders like Accion Opportunity Fund. They're specifically designed to provide funding support to minority groups like Native Americans, Asian Americans, or, in this case, African Americans.
The FTC enforces laws that protect consumers from deceptive mortgage practices by certain kinds of lenders. The FTC also takes action when companies use illegal tactics directed to people facing foreclosure.
The federal fair lending laws—the Equal Credit Opportunity Act and the Fair Housing Act—prohibit discrimination in credit transactions, including transactions related to residential real estate.
Mortgage servicers collect homeowners' mortgage payments and pass on those payments to investors, tax authorities, and insurers, often through escrow accounts. Servicers also work to protect investors' interests in mortgaged properties, for example, by ensuring homeowners maintain proper insurance coverage.