Lender Fraud Frustrations!!!

I don't know about you, but this sticky subject has come up in converstation frequently over the last several months, and I'm guessing it has affected many local agents out there trying to serve our clients and customers. Whether you work with Buyers or Sellers, this practise can affect you and your client. The frightening part is that you may not even be aware that it is going on in your transaction! I recently spoke with an agent who had such a story. Agent X was representing a Buyer, and the Buyer's loan had received a fully underwritten loan approval for a 90%LTV and 3% Seller credit for closing costs. Well there's nothing strange about this scenario that would give you cause for concern....right? So loan docs get drawn, Buyers and Sellers sign closing papers, and all await a seemless funding. But word comes from the funding department that they will only allow part of the credits, not the full 3%, leaving the Buyer short several thousand dollars! Upon further questioning of the loan agent, Agent X learns that part of the closing costs were being used to supplement the Buyer's downpayment. The loan agent explained that this practise had been used successfully before, but now it was being subjected to a "crack down". Surprise! No one saw that coming! (This one doesn't fit the scenario we've all been warned about of asking for excessive credits and giving the Buyer cash out at closing or upping the price and asking the Seller to pay the Buyer cash outside of the escrow, but it is nonetheless a legal action waiting to happen!) So how do we avoid being entangled in these situations that can at best cause our transaction to crumble and at worst not only put our license in jeopardy but possibly leave us doing time and paying significant fines? And what if it is going on right under our nose and we are not aware of it? Can we still be held accountable for something we didn't know? Is ignorance a valid defense? Or should we being doing something differently in the way we deal with all of our transactions that involve Seller credits (probably 90% of our closings these days)? Perhaps we should consider obtaining a disclosure from the loan agent stating that all the credits being sought by the Buyer are for legitimate closing costs. And maybe we should make it a standard of practise to have every Buyer sign an authorization for the loan agent to be able to discuss their loan information candidly with all agents involved in the transaction so that very direct questions can be asked of the loan agent before offers are written or accepted. What are your thoughts on this issue? Please take a moment to post a response.