Please note that information in the comment section of the letter we sent you.
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Who is Fraudmit? Back to the Top
Fraudmit is a nationwide provider of Quality Control Review and Risk Mitigation Services specifically designed and directed to work within the mortgage industry. As a third party vendor we are contracted on a regular basis by Wall Street Investment Firms, National/Regional Banks, Savings & Loans, Credit Unions, Mortgage Bankers, Mortgage Brokers and Mortgage Insurers to conduct quality control reviews & fraud audits.
Why is Fraudmit reverifying information and/or pulling credit on me? Back to the Top
Fraudmit is a third party outsourcing company that conducts Quality Control audits on Residential Mortgage Loans. This Quality Control function has been clearly defined by Housing and Urban Development (HUD) / FHA, VA, Fannie Mae and Freddie Mac, as well as, other private investors within their policies and procedures. It is further defined in their guidelines that they allow for “third-party” firms, like Fraudmit, to complete these audits. Audits are conducted with a signed authorization each borrower giving the lender and its successors and or its agents (Fraudmit) the right to reverify all information in the original loan file such as: employment income, assets, credit report and the collateral. All the reverification information collected is compared to the original information provided in the original loan file to verify that the information used to process and underwrite the loan was accurate and has not been altered in any way during the mortgage process. The Gramm-Leach-Bliley Act recognizes this function under its Permissible Purpose - Section 4: for use to protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability.
Why should I send this request for information back? Back to the Top
Sending the information back will help the lender meet their quality control requirements, and in cases of incorrect documents, it will help in getting them corrected.
Questions about a Reverification Letter we received from Fraudmit: Back to the Top
- We received a Re-verification Letter from Fraudmit. What is the best way for us to respond?
Fraudmit needs the original completed re-verification letter back, so the best way is to mail the information back. Mailing Address: 995 North State Road 434, Suite 2731 Altamonte Springs, FL 32714If you are unable to mail back to Fraudmit, here are two other options:Fax Number: (321) 256-9196- The authorization letter we received from Fraudmit is over 6 months old, and our organization requires a more current one, please advise what should we do? Please note that information in the comment section of the letter we sent you and then send it back to us.
- What if our files or records do not go back as far as you are asking to be re-verified? Please note that information in the comment section of the letter we sent you and then send it back to us.
- Our company has its own internal form that we use to reverify information that is similar to the one Fraudmit used to request information. Is it acceptable for us to use that form instead of the one you sent? The answer is yes. We also ask that you attach your internal form to Fraudmits request and mail them both back together. It is most important that you check the Fraudmit Re-verification Letter and double check that your company's form answers all the question on the Fraudmit form include your authorized signature, title, phone number and date. Please include in case we have any question.
- I am unable to read the documents you sent us and have requested to be re-verified. Please advise how we should handle this? Please note that information in the comment section of the letter we sent you and then send it back to us.
My company needs a Quality Control Plan since we are applying to be a Mortgagee or Correspondent Lender with the FHA: Back to the Top
Fraudmit sells Quality Control Plans that are in compliance with HUD/FHA, VA, FNMA and FHLMC. Click Here to learn more
Why do I need to do quality control file reviews? Back to the Top
If you are doing FHA loans, HUD requires that 10% of your companies originations be quality controlled. VA, Fannie Mae and Freddie Mac have similar standards. In addition, as a Sr. Manager or Owner it is good practice to review the quality of the loans being originated in your organization. Click here to read an article on "Dealing with Mortgage Fraud Starts at the Top" by Ralph LoVuolo, Jr.
How often does my company need to perform quality control reviews? Back to the Top
FHA requires that you perform your audit within 90 days, on a quarterly basis, if you are funding less than 15 FHA loans a month. If you are offering conventional loans to an investor that requires you to comply with Freddie Mac standards then you are required to do audits monthly, and the post-closing audit must be completed within 90-days from commencement date. FNMA requires reviews to be done monthly, in instances of low volume reviews to be done Quarterly and within 90 days of selection.
Can I conduct my own quality control file reviews? Back to the Top
The major agencies require that the quality control functions must be independent of the origination, processing and underwriting platform. This can be accomplished by with one of the following two options:
- In-House Staff - Company's may establish a department dedicated solely to Quality Control. Staff performing Quality Control reviews must not be involved in the day-to-day processes that they are reviewing.
- Outside Firms - Companies may engage outside sources to perform the quality control function. For FHA loans an FHA approved sponsor of a loan correspondents are acceptable as such outside sources as long as they perform and meet all the standards as outlined in HUD Handbook 4060.1, REV-2, Chapter 7. A mortgagee contracting out any part of its quality control function is responsible for ensuring that the outside source is meeting HUD's requirements. Any agreement with the outside source must be in writing, state the roles and responsibilities of each party, and be available for review by HUD staff.
As a mortgage broker I am sponsored by a lender to do FHA Insured Loans. Since my sponsor already does reviews on their closed loans, doesn't that satisfy HUD's requirement that a Mortgage Broker must conduct reviews? Back to the Top
It is HUD's position that as a sponsored loan correspondent (aka Mortgage Broker) submitting loans to a sponsor who's closed business is quality control reviewed is not a complete "substitute" for your organization to having an effective quality plan and review process in place. See HUD Handbook 4060.1, REV-1, Chapter 7 for more details.
I would like to request an Branch Audit for my Main Office, a Branch Location or Net Branch. Please advise how I would do this? Back to the Top
Fraudmit provides Executive Consulting Services that includes a review of your process flow from origination through post-closing. We also conduct, as part of our consulting services, branch audits in order to comply with your quality control plan for the FHA. Please click here to contact a member of our sales team.
How would I order a Quality Control Review? Back to the Top
There are two steps taken to initiate the review process. First, loans need to be selected for review. Together we would work to select these loans. On a monthly or quarterly basis, depending on your needs and company volume, you would send us a list of all your company's originations. This list can be sent to us from your Loan Processing Software in XML format or you can fax, emailed, or send in other electronic format such as PDF or TIF. You will be contacted by a Fraudmit representative who will provide you with a list of those loans selected for review. The second step would be to send us the files selected for auditing. You can send electronic copies of those files in imaging format. You can also send copy packages or the original file for review.
How much of our production should be reviewed in a Quality Control Audit? Back to the Top
The industry standard is a statistical sampling of 10%. However, depending on your company volume a greater sampling may be more suited. See HUD Handbook 4060.1, REV-2, Chapter 7 for specific details regarding HUD's requirements or click here to contact a Fraudmit consultant who will explain in further details.
We have a file that we suspect has FRAUD and we need to confirm it. What should we do next? Back to the Top
Contact us right away, we are here to help! You will need to send us a copy of the file for review.
We are moving forward with legal action and need to determine if there is any FRAUD in the file. What do we need to do?Back to the Top
You will need to send us a copy of the file for audit as soon as possible.
How do we send files to Fraudmit for review?Back to the Top
Fraudmit can accept most electronic formatted files, such as PDF & TIF. We also accept Original, Copied and Faxed files. Fraudmit also offers an FTP online submission option. To learn more click here.
What information does Fraudmit re-verify from the original loan file?
Prior to being reviewed Fraudmit will re-verify all income, employment, and asset information directly with the source of the original documenting. A new Credit Report may be ordered and then reviewed. The appraiser information is re-verified, and a desk review is done to determination if a field inspection is required. A letter is sent to the borrowers by asking them to re-verify the application. The process for doing a quality control review are described in FNMA, FHLMC, FHA and VA's quality control guidelines.
I have read the FAQ, and I still have questions. Can I call or email someone?
Yes, you can email us at FAQ@Fraudmit.com or you can call Ralph LoVuolo at
321-214-3381.
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