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Rule Requires Nonbank Lenders, Originators to Report Fraud

A financial fraud task force cleared a final rule Tuesday that requires nonbank mortgage lenders and originators to report suspicious activity related to mortgage fraud.

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The ""Financial Crimes Enforcement Network"":http://www.fincen.gov/ (FinCEN) said that originators and lenders will need to report any suspected fraudulent activity to the organization on an annual and quarterly basis.

""Today FinCEN is closing a regulatory gap by requiring

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non-bank mortgage lenders and originators to develop anti-money laundering programs and file suspicious activity reports with FinCEN,"" ""James Freis"":http://www.allgov.com/Official/Freis__James, FinCEN director, said in a statement.

He called the reports ""a critical source of information to law enforcement and regulatory agencies in their investigation and prosecution of mortgage fraud and a wide range of other financial crimes.""

The new rule reflects the scope of authority undertaken by the Obama administration as it pursues mortgage and financial fraud.

FinCEN gave credit to the new Financial Fraud Enforcement Task Force and Residential Mortgage-Backed Securities Working Group, both initiatives launched by the Obama administration in recent months.

The new rule will take effect two months after appearing in the Federal Register.

Established by the administration in 2009, the network collaborates with more than 20 federal agencies and 94 U.S. state attorneys general to pursue criminal and civil enforcement against financial fraud.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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