Fraud Identification Training Sept-Oct 2022

CASE STUDY 5

SECOND AVENUE BANK

Situation:

You have been assigned to review several loans from two particular loan officers of Second Avenue Bank. Review the information obtained from the following loan files and formulate questions and examination techniques to answer your particular questions/suspicions:

CASE A

8/18/X8

Loan #319 in the name of Pressley Jones for $186,882. Proceeds of $185M were issued in the form of a cashier’s check #9150 to the borrower. The purpose of the loan was listed as “purchase”, with real estate pledged as collateral. A mortgage in the name of Pressley and Dana K. Jones was filed on 8- 21-X8. The address listed on the loan is 150 miles from the bank. No loan application, credit report, financial statement, income information, appraisal or title work was in the credit file. Loan #375 in the name of Fay L. Grogan, Jr., for $180,937. Proceeds of $179M were issued in the form of a cashier’s check #9165 to the borrower. The purpose of the loan was listed as “real estate purchase”. A mortgage on real estate was pledged as collateral and filed of record on 8-26-X8. The address listed on the loan is approximately 130 miles from the bank. A Uniform Residential Real Estate Application was in file. The application was blank except for the signature of Fay L. Grogan, Jr. No financial statement, income information, credit report, appraisal or title work was in file. Loan #389 in the name of Scott J. Arnett for $169,812. Proceeds of $168M were issued in the form of a cashier’s check #9179 to the borrower. The purpose of the loan was noted as “purchase real estate”. A mortgage on real estate was filed on 8-27-X8. A commitment for title insurance, effective 8-18-X8 for $169M, was in file. The commitment stated title to the real estate was vested in the name of Ted E. and Rayleen M. Hush. No appraisal, credit report, or income information was in the credit file on the borrower. A financial statement on the borrower dated 8-2-X8 is in the file but the signature on the financial statement appears to be different than those on the note and mortgage.

8/20/X8

8/21X98

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