Learning Objectives
- Identify the red flags of a sweep operation
- Cite the federal statutes that make sweeps illegal
- Explain why sweeps unwind during mortgage underwriting
- Coach a buyer who has been approached by a sweep company
What a Sweep Actually Is
A sweep submits mass FCRA disputes claiming the consumer is a victim of identity theft, often filing a false FTC IdentityTheft.gov report. The bureaus temporarily block the items, the score jumps, the consumer is told to apply for a mortgage immediately — and the items return 30–60 days later, often during underwriting.
Legal Exposure
- Filing a false ID-theft report — federal offense, 18 U.S.C. § 1001
- Wire / mail / mortgage fraud if used to obtain a loan — 18 U.S.C. §§ 1341, 1343, 1014
- Loan called due in full, foreclosure, and criminal referral if discovered post-close
Red Flags
- Promise to delete everything in 30 days
- Requires the client to file an FTC identity-theft report they didn't actually experience
- Up-front fees of $1,500–$5,000
- Tells the buyer to apply for a mortgage immediately
Key Takeaways
- Sweeps are fraud and trigger federal exposure.
- Removed items usually return during underwriting, killing the loan.
- Refer buyers only to firms operating under the CROA with transparent timelines.
End-of-Module Exam
Module 9 Exam — 5 questions
Pick the best answer for each question. Pass with 80% or higher to mark this module complete.
- 1.
A credit sweep typically relies on:
- 2.
If sweep activity is detected after closing, the lender may:
- 3.
Filing a false FTC identity-theft report violates:
- 4.
A legitimate restoration firm operates under:
- 5.
The biggest red flag of a sweep is:
0 of 5 answered