FBI Mortgage Fraud Notice is an informational notice provided to the borrower to educate them of the penalties and consequences of the mortgage fraud activity. The notice was developed by Federal Bureau of Investigation (FBI) and Mortgage Bankers Association (MBA) in March 2007 with the intention to deter fraud by highlighting the high penalties or imprisonment. The notice is also known as FBI Mortgage Fraud Warning Notice.
The notice provides a broad description of what constitutes mortgage fraud and informs the reader that mortgage fraud is investigated by FBI and is punishable by up to 30 years in federal prison or $1,000,000 fine, or both. The notice also lists various federal statues under which prosecution for mortgage fraud may occur.
The use of the notice is optional for you. You may provide this notice during the origination stage as a fraud prevention measure designed to deter the borrower from making any false statements or committing mortgage fraud by highlighting the stiff penalties and imprisonment for committing mortgage fraud.
There is no need to customize the notice before you provide to the borrower. In fact, FBI prohibits making any changes or alterations to the information in the notice without the written consent of the FBI.
Since the use of the notice is optional, there is no need to require the borrowers sign the receipt of the notice or have any recordkeeping to evidence the delivery of the notice.
The notice is for informational use only and does not require any action. The only take-away is that mortgage fraud carries stiff punishments.
Updated: Sep 27, 2017