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Mortgage Fraud

Privacy Impact Assessment
Mortgage Fraud Database
November 8, 2005

I. BACKGROUND

This PIA is conducted pursuant to the E-Government Act of 2002, P.L. 107-347, the accompanying guidelines issued by the Office of Management and Budget (OMB) on September 26, 2003, and the FBI's PIA guidelines.

Mortgage fraud is a significant and growing concern in the United States. Mortgage fraud schemes are perpetrated by individuals acting alone or in collusion with borrowers, loan originators, or real estate professionals. All mortgage fraud schemes contain a material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan. Given the significant role of mortgages in our economy, mortgage fraud has been recognized as a significant criminal problem by the FBI and has been treated accordingly. To that end, the Atlanta Field Office (ATFO) has a Mortgage Fraud Working Group which investigates mortgage fraud violations.

The ATFO advises that its current methods of identifying mortgage fraud violators and violations are inefficient. The ATFO advises that upon receipt of mortgage fraud information, the ATFO conducts searches of the Automated Case System (ACS) to locate Suspicious Activity Reports (SARs) and FD-71 Complaint Forms. Special Agents (SAs) print out the SARs and FD-71s and extract pertinent information from these reports. The ATFO advises that the process is very time consuming. In order to

provide SAs with the tools necessary to more readily identify mortgage fraud violators and patterns of fraudulent activity, the ATFO has developed the Mortgage Fraud Database. The ATFO advises that the database will contain personal identifying information such as name, date of birth, social security number, address, occupation and relation, loan amounts, lender information, and other pertinent financial data derived from SARs and FD-71s. Lastly, the ATFO advises that the database will contain an analysis (a narrative describing the suspected fraudulent activity) developed by the ATFO.

II. ASSESSMENT

A. What information is being collected?

The Mortgage Fraud Database will contain information derived from SARs and FD-71s which are already in the FBI's possession. The database will contain personal identifying information such as name, date of birth, social security number, address, etc. The database will also contain loan amounts, lender information, and other pertinent financial data.

B. Why is the information being collected?

The information is collected to assist the ATFO in identifying mortgage fraud violations and patterns of fraudulent mortgage activity.

C. What is the intended use of the information?

The information will be used to identify mortgage fraud violations and patterns of fraudulent mortgage activity.

D. With whom will the information be shared?

The Mortgage Fraud Database will contain information derived from SARs and FD-71s. Information, including an analysis of mortgage fraud activity culled from these documents, will be entered into the database. Information may be shared with federal, state or local law enforcement agencies during the course of mortgage fraud investigations to the extent permitted by restrictions already applicable to the information. However, direct access to the database will be limited to FBI personnel.

E. What opportunities will individuals have to decline to provide information or to consent to particular uses of the information?

Information concerning mortgage fraud is gathered by the FBI during the course of routine investigations, including gathering

evidence, interviewing witnesses, interviewing subjects, executing search warrants, etc. As such, individuals are not provided with an opportunity to decline to provide information or consent to the particular uses of the information.

F. How will the information be secured?

The ATFO advises that access to the Mortgage Fraud Database will be restricted by password.

G. Is this a system of records?

Yes, the Mortgage Fraud Database will contain personally identifiable information regarding individuals and information will be retrieved by name or personal identifier. The Mortgage Fraud Database will be part of the FBI's Central Records System. Thus, a new Privacy Act systems notice is not required.

H. What choices the did the FBI make regarding an IT system or collection of information as a result of performing the PIA?

After conducting the PIA, the ATFO determined that the ATFO's current practice of printing out SARs and FD-71s from ACS is time consuming and inefficient. Thus, there is no reasonable alternative to proceeding with the development of the database. Accordingly, the ATFO has decided to proceed with the development of the database.

III. APPROVAL

The FBI's Senior Privacy Official has reviewed this system for privacy policy issues, perceives no unusual privacy concerns at stake here, and approves the FBI's implementation of the system. The database will be constituted from information already in the FBI's possession and thus does not involve any new collection techniques or processes that may be controversial or invasive of personal privacy. Ultimately, the Mortgage Fraud Database is a simple system which consolidates information from reliable sources and involves limited use and access and does not create any significant new privacy risks. As such, the OMB E-Government Act guidance does not require a more extensive PIA analysis.