Mortgage Banker Abuses Warehouse Line
Instead of funding his loan originations, a Louisiana mortgage banker had other plans for his warehouse line-of-credit.

Sabine State Bank provided a warehouse line to First Fidelity Mortgage Inc.

The line was secured by customer notes pledged by First Fidelity.
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Red Flags Rule Delayed
Implementation of the Red Flags Rule has been delayed again.

Despite HVCC, Valuation Fraud to Rise
Despite the implementation of the Home Valuation Code of Conduct, a new report suggests that occurrences of fraudulent home valuations are expected to shoot up by one-quarter. The report also indicated that states with the highest risk of mortgage fraud are those states with the highest levels of foreclosures.

Lenders Duped by Broker
A Florida mortgage broker has pleaded guilty to selling the same mortgage notes to multiple investors in a scheme that led to millions of dollars in losses. Among his victims were Bank of America Corp.

SS Verification Fees Soaring
The cost of verifying borrower social security numbers will increase by nearly 800 percent, according to a firm that provides verification services for lenders. The higher fee is expected to lead to more mortgage fraud and have a global impact.

FBI Zeros in on Insiders The director of the Federal Bureau of Investigation told Congress today that his agency is focusing on insiders in its mortgage fraud investigations.

NY Leads Nation in Mortgage Fraud
U.S. mortgage fraud cases mostly held steady during the latest quarter. Activity in California nearly tripled, while it nearly quadrupled in Massachusetts. But activity was up nearly 600 percent in New York -- where active cases exeeded all other states.

Secondary Marketing Fraud
Last month's failure of a New Jersey mortgage firm initially appeared to the result of elevated repurchases. But firm's chief surrendered this week amid charges the company was selling the same loans to multiple investors.

Fees Altered by Brokers on Closing Documents
Three California mortgage brokers have been arrested for doctoring up loan documents after they were signed -- and boosting their fees in the process.

ID Theft, Appraisal Fraud Drive Increases Fraud Risk
The risk of mortgage fraud has migrated west during the past year, a new study indicates. While fraud involving inflated home valuations and identity theft leapt, occupancy and income fraud tumbled.