CAMS · Question #558
A financial institution opens a mortgage loan for a customer. During a subsequent internal review of the loan, it was noted that the appraisal used to support the loan was performed by an appraiser…
The correct answer is C. Document the underwriter's actions prior to filing a suspicious transaction report. One of the red flags for money laundering in real estate transactions is the use of an appraiser who is not on the approved list of the financial institution. This could indicate a possible collusion between the appraiser and the borrower or the underwriter to inflate the value…
Question
A financial institution opens a mortgage loan for a customer. During a subsequent internal review of the loan, it was noted that the appraisal used to support the loan was performed by an appraiser who was not on the institution's approved appraiser list. This exception was approved by the senior loan underwriter. The reviewer, who had examined other loans from the same general area, noted that the value on the loan appeared significantly higher than on other comparable properties. Which of the following should the anti-money laundering specialist recommend next?
Options
- ADetermine whether the loan underwriter reviewed the appraiser's license for validity.
- BAlert local law enforcement regarding a potential collusive relationship between the un-derwriter
- CDocument the underwriter's actions prior to filing a suspicious transaction report.
- DTrain the appraiser on anti-money laundering compliance for high-end real estate loans.
How the community answered
(33 responses)- A18% (6)
- B3% (1)
- C70% (23)
- D9% (3)
Explanation
One of the red flags for money laundering in real estate transactions is the use of an appraiser who is not on the approved list of the financial institution. This could indicate a possible collusion between the appraiser and the borrower or the underwriter to inflate the value of the property and obtain a higher loan amount. The anti-money laundering specialist should document the underwriter's actions and the reasons for approving the exception, as well as the discrepancy between the appraised value and the market value of the property. The specialist should then file a suspicious transaction report (STR) to the relevant authorities, as required by the local
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