A lender asked a processor to backdate an application so that a closing could occur when the lender wanted it to. The processor refused. The compliance officer was notified. What type of additional follow up should occur? [Obviously, at minimum, the lender needs to be confronted and counselled, if not more....] Thank you for your input.

Second Anon Sez: That processor should be rewarded for doing the right thing.

I would say confronted is a strong word. The processor should notify their supervisor and their supervisor should take it up the food chain.

I would say file your SAR as the officer knowingly tried to commit mortgage fraud by altering documents related to a Federally related mortgage loan.

That would be right after the officer was fired of course.

I agree with Randy - a SAR is required in this instance. Kudos to the processor. I'm sure that was quite difficult.

I too agree with filing the SAR. This is intended fraud plain and simple.

PS. Suspending the MLO NMLS should also be considered as part of the disciplinary action.

Anon2 sez: Oh my! The phrase "so that a closing could occur when the lender wanted it to" could also mean when the customer wanted it to. I wouldn't do an automatic SAR on a loan officer for being ignorant, stupid, or pro-customer. Fire her? SAR her? Fraud? I'd involve the loan officer's boss, be sure the officer and boss understood how serious this was, and that the range of possible correct reactions includes termination and referral to federal law enforcement, and document the SAR Committee's decision whether to file, and move on.

There is no discussion. The loan officer asked the processor to violate Federal law. You have no option on filing the SAR. Ignorance of any law is never an excuse.

If a loan officer is that stupid, what else have they done or forged?????

I think the fact that the question is being asked at all points to inner turmoil at the level responsible for filing SARs and disciplining employees. An employee cannot force management to do anything.

I'm going to join the SAR filing and employee termination chorus. Not a hard call at all.

Add me to the alto section.

could be that the bank has never experienced an issue like this and is unclear on what steps to take. I think it has been succinctly pointed out - SAR and termination.

Anon2 sez: Ah. It has suddenly become clear to me why loan officers seem to change banks so often! The combination of their brave-bold stupidness with our knee-jerk reactions to mistakes would certainly have shortened the careers of many a loan officer around these parts. No investigation, no discussion, just fire him based on your assumptions after reading a 56-word, 4th-party description of his alleged verbal request. At my shop, there is always a discussion. If there is no discussion, the SAR Committee is nonfunctional and all of its supposed decisions would become ever subject to my overriding them.

Everything ever posted on BOL is always subject to what information is given though. The original poster said "A lender asked a processor to backdate an application so that a closing could occur when the lender wanted it to";<<i think that statement implies if not flat out states that an investigation and a discussion have already occurred. Nothing would ever get accomplished in these threads if people aren't taken at their word. That's what the OP said happened; is everyone in these threads supposed to say "are you sure that's what happened? Let's talk about how you know this happened." People ask questions; people who answer in these threads take them at their word as to what is happening in their financial institution.

Anon2 sez: Good point. I'm just always appalled when the answer to any question is "Fire them before you finish reading this post!" I tend to want more info before making decisions, but I see what you mean.

I think you need to file the SAR - termination is up to management - they may be fine with a stern meeting & documentation to the employee file, but also you definately need give additional training & help your lending staff to realize what other affects "backdating" could have - this is a great training scenario for BSA training - think about the proper timing requirements for the disclosures, ROR, etc.& what can happen if they're not provided properly - lenders may be able to sneak around and get these done faster/earlier by messing with the date & fool your audit team or examiners - but it's that customer you need to worry about as well - what if it all goes wrong and they're backed into that proverbial corner - the liability to your back would be great. KUDOS to your processor!!

you sign on anonymously to a banking website, provide anonymous information about an incident, people provide anonymous responses based on what limited information is provided and trying to answer based on what they would do, and you are upset with these responses?

I've yet to see anyone respond as bluntly as you've phrased it above, but there are many posters on this site that have 25+ years experience dealing with these type of issues, and chances are that in 99 out of 100 times, the response they provide is the best option based on the limited scope of the question.

you have a post that states an employee has asked someone to falsify official bank records - what other response is there other than termination?

Anon2: Well, everyone that knows me realizes that if you want to post a question, which is basically requesting me to provide an opinion if I choose to, I will give it to you. I am one of the posters with 25+ years of banking experience before embarking into the consulting world. I worked in banking during a time when people where trained and then expected to perform. A knowing violation of Federal law was always met with immediate termination. If the loan officer didn't know that backdating an application was the violation of Federal law when they asked the loan processor to do it, they must have been asleep most of their banking career and need to move on.

I also don't hide my opinions behind the "anonymous",