OFHEO Extends Comment Period for Proposed Rulemaking on Mortgage Fraud Reporting

WASHINGTON – The Office of Federal Housing Enterprise Oversight has extended the comment period for its proposed mortgage fraud reporting regulation from March 28 to April 4. The proposed rulemaking entitled "Mortgage Fraud Reporting" would set forth safety and soundness requirements with respect to mortgage fraud reporting in furtherance of the supervisory responsibilities of OFHEO under the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. OFHEO proposed the regulation Feb. 22 to require Fannie Mae and Freddie Mac to report mortgage fraud or possible mortgage fraud to the agency "in a timely fashion," an OFHEO release stated. The regulation would also require the housing Government Sponsored Enterprises to establish internal controls, procedures and training programs to detect and report mortgage fraud. In announcing the proposed regulation, OFHEO Director Armando Falcon Jr. stated that the rule will ensure that Fannie Mae and Freddie Mac do their part to help combat mortgage fraud. The Enterprises will now have a clear obligation to report fraud and help prevent a repeat of cases like the First Beneficial matter, he added referring to the recent case of alleged fraud involving First Beneficial Mortgage Corp., Olympia Mortgage Corp., and United Homes LLC. OFHEO said it received requests for a deadline extension from the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation "to enable them to present their respective views in a manner that is as comprehensive and as helpful to OFHEO as possible." The extension, said OFHEO, "will ensure that all interested parties have ample opportunity to participate in the rulemaking process by providing meaningful comment in the development of the proposed regulation." -