Red Flags Policy and Procedures

Description

The Red Flags Policy and Procedures has been developed in compliance with the Fair and Accurate Credit Transactions Act (FACTA) Red Flags Rule. It requires lenders to implement processes that detect, prevent, and mitigate identity theft as part of their daily business operations.

This policy outlines how to recognize and respond appropriately to red flags—specific warning signs of potential identity theft—that pose a risk to a mortgage company. It includes a list of common red flags identified by Fannie Mae and Freddie Mac to help guide staff in monitoring for suspicious activity.

Additionally, the policy provides instructions for reporting identified red flags through the proper channels, including the filing of a Suspicious Activity Report (SAR) with FinCEN when necessary.