Independent Banker - April 2020 - 29

Next: The bond portfolio writes back to the bank president
While we
generally think of
compliance strictly
as a consumer
protection function,
many compliance
processes are
fundamental
to preventing
and detecting
mortgage fraud.
of fraudsters, is difficult to detect until
losses have occurred, and may be more
difficult to control or detect in a thirdparty
scenario outside the bank's walls.
The potential for fraud lurks in many
creative schemes (see " Types of mortgage
fraud " ), and if community banks
are not aware of the dangers, they and
their customers may fall victim to losses
from the deceit and misrepresentation.
Ron Haynie, ICBA senior vice president,
mortgage finance policy, sums it
up this way: " Community banking is
local, not national, and the success of
community banking relies on knowing
your customer and the other parties
involved in any transaction. The fundamentals
of safety and soundness
and compliance, conducting your due
diligence, and knowing the transaction
are the best tools community bankers
have to thwart mortgage fraud. "
Mary Thorson Wright, a former Federal
Reserve examiner, is a financial writer
in Virginia.
i
Open the Compliance Vault
Need an answer to a burning compliance question? Visit the
ICBA Compliance Vault at icba.org/compliance and get access to
more than 2,300 Q&As.
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Independent Banker - April 2020

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