Red flag plan
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The document outlines a comprehensive fraud prevention plan for loan processing at The Funding Source, LLC, detailing protocols for verifying borrower information, employment, credit inquiries, and suspicious activities. Key measures include validating social security numbers, verifying income, and conducting thorough background checks to mitigate identity theft and fraud. It emphasizes the responsibility of employees to ensure all transactions are legitimate before closing and provides guidelines for addressing various types of suspicious activity.
![TFS to ensure that all signatures are reasonably from the same person.
8. Large Deposits
Track all large deposits, as defined as $500.00 over the borrower’s typical deposits that are sourced to
the borrower’s income. Document and place documentation and LOX from borrower in file.
Any unsourced large deposit over $10,000.00 requires the borrower bank account be escalated to
management to deterime if a SARS report is required to be filed.
If it is determined that a SARS report must be filed, Management will direct you to: file a FinCEN's BSA E-filing
System.[4]
A SAR has five sections each containing information about the filing institution or the activity in
question:
Part I
The filing institution's name, address, tax ID number, location of the activity and any account numbers
involved with the suspicious activity.
Part II
Any name, address, social security or tax ID's, birth date, drivers license numbers, passport numbers,
occupation and phone numbers of all parties involved with the activity.
Part III
The date range of the activity, total dollar amount and a list of any law enforcement agency that has
been contacted while investigating the activity.
Part IV
Usually[clarification needed] contains the contact information for the financial institution's
compliance officer or equivalent.
Part V
A written description of the activity.
CONCLUSION:
It is the responsibility of all TFS employees to ensure that fraudulent activities are
stopped prior to closing.
All employees must be vigilant and follow the above procedures at all times. If there is a question
regarding the validity of a borrower or information provided, it is the employees’ responsibility to gather
enough information to confirm identity and information provided.
If confirmation of information cannot be done, the process must be stopped and the transaction will
be denied.](https://image.slidesharecdn.com/redflagplan-140917110918-phpapp01/85/Red-flag-plan-4-320.jpg)
Red flag plan
- 1. The Funding Source, The Funding Source Syracuse,Syracuse.com,The Funding Source Syracuse NY,The Funding Source RED FLAG PLAN OF ACTION Suspicious Activity Report (SARS) Policy THE FUNDING SOURCE, LLC MORTGAGE BANKER Rev: The purpose of this plan is to detect, prevent and mitigate identity theft and fraud by Institute a course of action to be followed on all loan files and executed prior to closing. The goal is to ensure data integrity on all files to mitigate repurchase risk while Originating quality, fraud free, transactions. To ensure data integrity in all loan files The Funding Source (TFS) must validate the loan data at all times. It is the duty of the lender to confirm all borrowers’ information. Therefore, the following protocol must be followed on all loan files: 1. Social Security Number Verification of applicants Social Security Number: SSN authorization form (SS A-89) must be signed at the time of application, all SSN are to be validated through Fraud Guard with proof in file. Legible copy of social security card to be provided prior to closing and in credit section of processing file. 2. Occupancy Verification of occupancy status for current residence: Current utility, phone or cable bill to be supplied reflecting borrowers current address. Bill must be dated within 30 days of application, and in loan file. Real-Info (www.real-info.com) to be pulled on property and put in file, confirm property ownership as it relates to the loan file (i.e. borrower if a refi, seller for a purchase transaction—compare to sales contract). If unavailable, web search information to be pulled and in file, current deed for a refinance. Verification of occupancy status for subject property (owner occupied): Real-Info or appropriate web search to be pulled and in file. 3. Mortgage Obligation Verification:
- 2. Verification of all mortgage obligations: MERS search to be pulled through Fraud Guard and put in file. Run Realinfo on borrower to ascertain any other properties. Utilize title searches pre closing to verify owner occupancy. Fraud Guard provides a layer of protection as it interfaces with identity of interest and property ownership. 4. Credit Inquires All credit inquires must be researched by credit company to ensure no new credit has been extended, this information to be put in file as well as signed letter of explanation from the borrower. TFS to ensure that all new debt is accounted for in the underwriting of the file as well as confirm that borrowers LOE matches the credit companies information. Lender to pull an updated credit status report before closing. Any new debts must be used to re-qualify the borrower. All credit reports/supplements/searches are to be in the file stacked from newest to oldest. 5. Non Disclosed and Debt Utilize Credit Monitoring during the mortgage application from origination to 48 hours post-closing on each borrower. Credit Monitoring via Credit Plus will email an alert to you on your file should the borrower obtain or attempt to obtain additional debts after the mortgage application. 6. Verification of all employer information: TFS to pull Department of State information for all employers when available. TFS will also ensure that we have three (3) supporting documents for the employer contact information and those are in each file (i.e. reverse 411, Google and switchboard; or the borrower’s state Department of State business filing matching address to the employer with google search and 411.com; et. al.). 7. Verification of employment status: Each file will have two VOE’s. The first is to be written and completed either by the employer OR use the WORK # (if employer does not provide written VOE) and must be completed prior to clearing the file to close. The second shall be completed within 48 hours prior to closing and will be a verbal VOE (as well we second WORK # for those companies). Both VOE’s must be in the file, stacked newest to oldest. 8. Verification of Income: Each file is to have a signed statement on TFS letter head, indicating that the loan processor and underwriter confirm that the borrower had income at the time of application, per the documentation provided. 9. Verification of disclosed annual income: TFS to order most recent 2 years IRS transcripts on all borrowers to verify against W-2’s provided by the borrower.
- 3. 10. Verification of Excluded Parties: All files to have LDP, GSA and CAIVRS pulled on the following parties: borrower(s), loan officer, and all related parties to the transacation. 11. Overall Fraud Control: All files to have Fraud Guard run prior to closing (including the previously outlined MERS). The summary is to include the OFAC reading and all variances cleared. Supporting documentation must be filed as needed in the processing file. 11. Suspicious Activity: Lender to be aware of the following suspicious items and employ additional reviews to ensure loan and borrower quality: Fraud Alert: Fraud alert on credit report. Must have signed permission from borrower to continue with transaction. LOE must specifically address what trigger the alert. Finding must be cleared with substantiated documentation. 2. Credit Freeze Notice of a credit freeze in response to request for credit report- Borrower will need to address this with credit agency directly. Suspend file. Decline after 30-days if there is no activity or satisfactory response. 3. Address Discrepancy: Credit company issues notification of address discrepancy: TFS to ensure all addresses are input correctly and get all necessary clarification from the borrower. 4. Unusual Credit Activity Unusual credit activity includes items such as increased number of accounts, balances or inquires: TFS to confirm levels of activity and re-evaluate credit risk 5. Forged or altered documentation: TFS to ensure all documents are originals or exact replicas. (Require Teller Stamped bank statements on bank statements and transaction reports as a default requirement for all borrowers). 6. Information on ID or photo inconsistent with person filling out application: TFS to ensure identity using aforementioned processes. 7. Signature inconsistencies:
- 4. TFS to ensure that all signatures are reasonably from the same person. 8. Large Deposits Track all large deposits, as defined as $500.00 over the borrower’s typical deposits that are sourced to the borrower’s income. Document and place documentation and LOX from borrower in file. Any unsourced large deposit over $10,000.00 requires the borrower bank account be escalated to management to deterime if a SARS report is required to be filed. If it is determined that a SARS report must be filed, Management will direct you to: file a FinCEN's BSA E-filing System.[4] A SAR has five sections each containing information about the filing institution or the activity in question: Part I The filing institution's name, address, tax ID number, location of the activity and any account numbers involved with the suspicious activity. Part II Any name, address, social security or tax ID's, birth date, drivers license numbers, passport numbers, occupation and phone numbers of all parties involved with the activity. Part III The date range of the activity, total dollar amount and a list of any law enforcement agency that has been contacted while investigating the activity. Part IV Usually[clarification needed] contains the contact information for the financial institution's compliance officer or equivalent. Part V A written description of the activity. CONCLUSION: It is the responsibility of all TFS employees to ensure that fraudulent activities are stopped prior to closing. All employees must be vigilant and follow the above procedures at all times. If there is a question regarding the validity of a borrower or information provided, it is the employees’ responsibility to gather enough information to confirm identity and information provided. If confirmation of information cannot be done, the process must be stopped and the transaction will be denied.