Mortgage loan fraud is one of only a few suspicious activity categories to show an increase in the past year, according to the Treasury’s Financial Crimes Enforcement Network (FinCEN), and is the only category to see an increase every year since 2001.
The most recent FinCEN findings based on suspicious activity reports (SARs), show that five of 22 suspicious activity categories exhibit an increase from the previous 12 months, including mortgage loan fraud, which saw a 5% increase from the previous year. Overall, most categories saw a decline in suspicious activity, and the categories seeing an increase were less than half in number compared with the year before.
Mortgage loan fraud as identified by depository institutions as a type of suspicious activity is the only category to see a consistent increase over the past ten years, with 2009 and 2010 comprising 39% of suspicious activity instances. (The report notes that depository institutions can submit suspicious activity reports relating to mortgage loan fraud well past the actual date of activity.)
The report does not identify reverse mortgage fraud specifically, but FinCEN Director James Freis, Jr. told Mortgage Bankers Association’s National Fraud Issues Conference attendees in April that the Treasury Department is working to combat fraud relating to reverse mortgages. At the time, he said the economic environment and financial uncertainty have resulted in an increasing number of seniors accessing home equity to ease their financial situations, and are increasingly becoming a target for scammers.
View FinCEN’s most recent SAR report.
Written by Elizabeth Ecker