All lenders must have comprehensive policies and procedures in place to prevent, detect, and report mortgage fraud, in alignment with Fannie Mae Selling Guide Announcement SEL-2024-07. Maintaining the integrity of loan information and processes at every stage of the mortgage lifecycle is critical to compliance and risk management.

Key Compliance Requirements:

• Fraud Prevention: Lenders must implement proactive measures to identify and mitigate potential fraud risks during the loan origination, underwriting, and closing processes.
• Fraud Detection: Internal controls must be in place to monitor transactions and identify red flags indicating potential fraud.
• Fraud Reporting: Lenders must establish a clear and documented process for reporting suspected or confirmed mortgage fraud. This requirement applies at all stages, including post-loan sale if fraudulent activity is discovered.
• Process Integrity: Lenders must ensure that all mortgage transactions maintain data accuracy, borrower verification, and regulatory compliance throughout the loan lifecycle.

Lender Responsibilities:

• Establish and maintain written policies and procedures for fraud prevention, detection, and reporting.
• Conduct regular training for staff on recognizing and addressing mortgage fraud risks.
• Maintain documentation of all fraud-related investigations, actions taken, and reports filed.
• Report any identified mortgage fraud immediately per Fannie Mae’s requirements and follow established escalation protocols.
• Lender reports of identified mortgage fraud should be sent by email to: ahfa.au.audit@ahfa.com

All lenders must review their current policies and procedures to ensure compliance with SEL-2024-07 and take immediate action where necessary.

For full details, refer to Fannie Mae SEL-2024-07.

If you have any questions, please contact Brian Hunt, bhunt@ahfa.com.