Is it gambling?  

You want a recorded picture of them in case they are fraudulent.

Possibility of sports gambling?

Turns out he had been convicted of fraudulent activities.

I feel that even though this is meant to protect, prevent & detect fraudulent activities or money laundering or any criminal associated activity, which ultimately is meant to protect consumers, it conveys negatively for that consumer trying to obtain an honest mortgage.

We had to file paper copies this year because my wife's SSN was stolen last year and used to file a fraudulent tax return. 

In my area distressed properties from wholesalers usually are in distressed areas so the purchase is a gamble on the condition of the property, a gamble on the area than a gamble on hired contractors.

Honestly there is so much fraudulent activity going on with the loans, that I really doubt someone taking an extra distribution is going to even garner any attention.

Biggest problem with this side of the biz is honesty, don’t commit fraud or advertise fraudulently.

You have to pull from it while still living there or its fraudulent.