Washington, DC – The Office of Federal Housing Enterprise Oversight (OFHEO) has issued a revised Policy Guidance on the Examination of Mortgage Fraud Programs of Fannie Mae and Freddie Mac. The guidance details the standards for overseeing and evaluating policies and programs the Enterprises have developed to minimize mortgage fraud.
“Mortgage fraud can pose tremendous risks for consumers,” said OFHEO Director James B. Lockhart. “This guidance reflects the ongoing work of both OFHEO and the Enterprises in the development and improvement of mortgage fraud detection and reporting,” said Lockhart.
The new Policy Guidance:
- Permits the Enterprises to designate scenarios that rise to a “pattern” of reportable cases of mortgage fraud or possible mortgage fraud further enhancing their reporting to OFHEO;
- Expands the immediate notification requirements to OFHEO to include situations involving insider fraud;
- Revises the time frame and format of reporting to follow the Department of the Treasury’s Financial Crimes Enforcement Network requirements; and,
- Adds clarifications to the definition of mortgage fraud, which continues to be defined as any material misstatement, misrepresentation, or omission such as, but not limited to, false information contained in identification and employment documents, false mortgagee or mortgagor identity, fraudulent appraisals, theft of custodial funds, non-remitted payoff funds, misrepresentations of borrower funds, and property flipping where designed to falsely inflate property value.
The new guidance supersedes a July 2005 Policy Guidance on Mortgage Fraud Reporting. Link to new guidance.
OFHEO’s mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac