twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.reversefunding.com

subscribe to free Mortgage Daily email newsletter

Mortgage Fraud News | Fraud Statistics | Fraud Index | Fraud Blog
Mortgage broker, originator and banker criminal cases. Real estate flipping and appraisal fraud. Mortgage fraud prevention, studies and analysis.



Alt-Documentation Loans at Greater Risk of Fraud

Report discusses bank statement loans

Nov. 30, 2016

By Mortgage Daily staff



A new report says that residential loans which are underwritten using alternative documentation are more susceptible to fraud.

Mortgage programs that utilize banks statements and letters from certified public accountants are more risky than traditional loans.

Such alternative document programs carry greater risk of income fraud. In some cases, additional documentation might be required.

That is according to the report, Short-Term Bank Statement Loans Carry Heightened Risks, from Moody's Investors Service.

The ratings agency said that programs which require banks statements for just 12 months or less present the most risk because the shorter window requires underwriters to make assumptions about the prospective borrower's total income.

"While a typical bank statement program uses 24 months of bank statements to demonstrate income, those that allow borrowers to provide less than this have the highest risk of income fraud," Moody's stated. "Not only does the shorter window mean that underwriters must make assumptions about a borrower's total income, but fewer bank statement won't reflect the stability of the borrower's income over a period of time."

In addition, short-term bank statements might not comply with the Consumer Financial Protection Bureau's ability-to-repay rule.

"Lenders can reduce this risk by verifying bank statements directly with the bank, using targeted pre- and post-quality control processed that focus on income fraud risk and providing underwriters with specialized fraud training," Moody's said.

next story

back to current headlines


Mortgage Compliance News | Mortgage Compliance Newsletter | Mortgage Regulations
News about complying with mortgage laws, rules and regulations.

www.elliemae.com
Logout forgot
password?

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

free mortgage news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

sales blog

secondary marketing

social media

servicing news

subprime news

wholesale lenders

wireless mortgage news