2014 Red Flags Quiz

The Red Flag issues addressed in this training session do not apply to our Retail Originators because they are essentially our own SPM company employees.

There is no need for me to be educated on the various fraud schemes or red flag issues because that is my manager's responsibility.

Documentation, where the numbers appear to be squeezed or contain different colors ink, type/font styles, or other alterations, should not be questioned because we do not want to be unreasonable and provide poor customer service.

If my loan is not located in an area identified by FNMA Fraud Finding Statistics, I do not need to review my loan files for red flag or fraud issues.

Whenever I can identify a red flag issue, that automatically means fraudulent activity is present in the loan file.

With declining loan volume, fraudulent activities are almost extinct and we need not be concerned.

As long as the loan application is fully completed with all required information, signed and dated by both the Borrower and Loan Originator, then red flag issues and/or potential fraud are of no concern.

Occupancy issues are really not considered fraud or misrepresentation because it is really just a pricing issue.

A Borrower’s letter of explanation (LOE) is always the best source for addressing and clarifying file inconsistencies and red flag issues.

Asking for additional information that is not required by the AUS system (DU or LP) is not acceptable because we would “over-documenting” the loan file and providing poor customer service.

We do not have to be concerned with undisclosed debts because we always pull a credit report on the Borrowers.

There is a direct correlation between the number and severity of red flag issues present in the loan file and fraud.  E.G. the more severe and the higher the number of red flags, the more likely that fraud is present.

Insider collusion has been on the rise and may expect to increase further.

The term “Insiders” as used in the above question does not include anyone that is employed in the mortgage industry.

FBI agents rank mortgage fraud as a high priority.