The Federal Financial Institutions Examination Council has released an updated editionof its white paper on mortgage fraud detection and deterrence. The primary objective is to help examiners understand, identify, and detect mortgage fraud schemes and elements. The white paper defines various types of fraud, gives examples of how individuals commit fraud, provides a list of red flags, and outlines best practices.
The Federal Deposit Insurance Corp., in coordination with the other member agencies of the Federal Financial Institutions Examination Council, adopted a policy statement supporting prudent commercial real estate (CRE) loan workouts. The policy statement stresses that performing loans, including those that have been renewed or restructured on reasonable modified terms, made to creditworthy borrowers will not be subject to adverse classification solely because the value of the underlying collateral declined.
During Oct. 15, 2009, debate on a bill that would create a Consumer Financial Protection Agency, Republican committee members offered an alternative proposal that would rely on the Federal Financial Institutions Examination Council. They also criticized the bill’s Community Reinvestment Act provisions and unsuccessfully offered an amendment intended to exempt community banks from CRA requirements.
The Federal Financial Institutions Examination Council has issued a statement titled “Support for Responsible Loss Mitigation Activities” that is intended to offer guidance to mortgage loan servicers who service both a first-lien and subordinate-lien loan on the same property. The agency noted that, in such a situation, the servicer could be faced with a conflict of interest when deciding whether to modify one of the mortgages.
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