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Lenders are accountable for the contents of a loan file, including:
x The sources of and authenticity of all qualifying documentation; and
x Representation made on the loan application, such as occupancy, employment
income, assets, equity contribution, etc.
Lenders must ensure they have adequate quality control procedures in place to help detect and effectively prevent mortgage fraud. Sound pre-funding quality control practices and rigorous post-funding quality control programs are examples to safeguard against fraud. The quality control procedures should address updating company policies and procedures when fraud is discovered.
When a lender becomes aware of mortgage fraud, they must report the findings surrounding the discovery to the Quality Assurance and Lender Oversight Division at SFHGLD.Compliance@usda.gov. The following information should be included:
x Provide the name, email address, and telephone number of the company point of
contact of the case reported;
x Indicate if the fraud involves origination or servicing of the loan;
x Indicate the originating lender (underwriting lender) and/or servicing lender, as
applicable. Include the lender’s federal tax identification number and the lender loan number;
x Agency borrower identification;
x Property street, city, state, and zip code;
x A detailed description of findings; and
(03-09-16) SPECIAL PN 4-7 Revised (08-05-25) PN 649 Guidance documents lack the force and effect of law, unless expressly authorized by statute or incorporated into a contract. USDA may not cite, use, or rely on any guidance that is not available through their guidance portal, except to establish historical facts
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x Identify the mortgage broker, loan officer, appraiser, closing agent, real estate
agents, etc., as applicable.
Refer to Chapter 1 of this Handbook for more information regarding falsely submitted information, fraud, and unauthorized assistance.