The Financial Crimes Enforcement Network issued a proposal Monday that would subject nonbank mortgage lenders to Bank Secrecy Act requirements.
The proposal would culminate a seven-year delay by the agency to subject mortgage lenders, including mortgage brokers, to anti-money laundering regulations. Under the proposal, nonbank mortgage lenders would be required to follow all anti-money-laundering obligations, including due diligence, establishing an AML program and filing suspicious activity reports.
Fincen defined residential mortgage lender as "the person whom the debt arising from a residential mortgage loan is initially payable on the face of the of the evidence of indebtedness" or "to whom the obligation is initially assigned at or immediately after settlement."
Residential mortgage originator is defined as a person who "takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain."
Fincen defined residential mortgage loan as one "that is secured by a mortgage, deed of trust, or other equivalent consensual security interest" on a one- to four-family home.
Fincen specifically requested comment on those definitions.
