Red Flag Training 3/14/13

1. Red Flag Training3/14/13

2. Red Flag Training HomeBridgehascreatedthefollowingfraudprevention “redflags”trainingtooltohelpdetectearlywarningsignsofanyinconsistenciesthatshouldbequestionedandsupporting documentationshouldbeobtained. As partofourcommitment toworkingwithourSellerswe havedevelopedalistwhichis notall-inclusive,butcould potentiallyberedflagsthatmayindicatefraud.

3. Red Flag Training Whilethepresenceofoneormore“redflags”donot necessarilyindicatetherewasfraudulentintent,we encourageSellers toimplementinternalpoliciestodetectand eliminatefraud. • Qualityisthepreventionofmortgagefraud,andHomeBridge is committedtoprovidingeffectivetrainingon how to: • Identifyanddetectmortgagefraud • Monitorandquestioninconsistenciesandrequire explanationandfurtherdocumentation

4. Red Flag Training Examplesofdiscrepancieslistedbelowinclude,butis notlimitedto, instances thatwouldrequireexplanationandpossiblyfurther documentation: • Fileinformationisnotconsistentthroughout • Thetransactionsinnotarmslength • Thepropertywastransferredinthelastsix(6)months • Signaturesvary fromdocumenttodocumentandarenotconsistentthroughoutthe file • Anowner-occupiedrefinancetransaction,howeveritwasdiscoveredtheborrower doesnotresideintheproperty • Currentresidencevalueisgreaterthanthevalueofthepropertytobepurchased • Isthepurchasepriceandvaluereasonableandconsistentwiththedownpayment andsellerincentives

5. Red Flag Training • Income,employmentorassetdocumentationindicateevidenceofalterations, misspellingsorerrors • Arethereanyfraudoractivedutycreditalertsor mismatchedinformationonthe creditreport • SocialSecuritynumberismismatchedortransposed(toaccessthefirstthreedigitsofthe SS numbersassignedthroughouttheUnited States,goto: www.ssa.gov/employer/stateweb.htm) • Ageoftheapplicantdoesnotmatchthecredithistory • ThereisanaddressmismatchedonthecreditreportorIRS transcripts • Applicant’s credit history shows accounts opened prior to his/her birth of SS issuance • Notice of credit freeze in response to request for a consumer credit report

6. Red Flag Training • Inconsistentactivitypattern(i.e.volumeofinquires,unusualnumberofrecently establishedcredit,changeintheuseofcredit,etc.) • Incomedocumentationdoesnotmatchthe1003orotherfileinformationsuchas addressonW-2’s,paystubsoremployerinformation • Purchasepriceisnotconsistentwith theapplicant’sincome(i.e.valueislessthan½ theborrower’sincome) • Photographorphysicaldescriptionisnotconsistentwith theappearanceofthe applicant • Signaturesondocumentsdonotmatch • A significantcommutingdistancebetweenapplicant’spropertyandemployer • Applicantispurchasinganinvestmentpropertyhoweverdoesnotownaprimary residence

7. Red Flag Training • Same telephone number for applicant and employer • Liabilitiesshownoncreditreportthatarenotonthe1003 • Recentinquiriesfromothermortgagelenders • Numbersthatappeartobe“squeezed”onanyincomedocumentation • Evendollaramountinyear-to-date-orpast-yearearnings • Applicantreportingsubstantialincomebutnocashsavingsinbank • VOEis addressedtoaspecificindividual’sattention

8. Red Flag Training • Ontheappraisal,thecompsareasignificantdistancefromthesubject • Largepositiveadjustmentsaremadetocomparable properties • Appraisalisdatedbeforethesalescontract • Significantappreciationhasoccurredinashortperiodoftime • Illegiblesignaturesand/orvariationinfonttype

9. Red Flag Training • All informationprovidedis atahigh-leveltohelpquestionanddetect warningsigns ofmortgagefraud. • Sellersarerequiredtoconductacomprehensivereviewofall mortgageloanstoassess theaccuracyand integrityofall documents. • All loansshouldbereviewedtoensureprudentcreditunderwriting practicesandoverallrisk toevaluatethefive(5) C’s ofunderwriting: • Character • Capacity • Capital • Collateral • Conditions