The number of mortgage loan fraud suspicious activity reports showed a near-one-third increase in the first quarter of 2011, rising 31% since the fourth quarter of 2010 to 25,485 reports.
The Financial Crimes Enforcement Network (FinCEN), which tracks the number of suspicious activity reports, attributed the increase to large mortgage lenders that are conducting additional reviews after receiving demands to repurchase poorly performing mortgages.
Regionally, California was found to occupy the top position for mortgage fraud rankings and Miami, which was formerly the second most reported area, fell to the sixth most reported area.
“A substantial majority of reports involved activities which occurred in 2006-2007, an indication that the industry is slowly making its way through the most problematic mortgages,” said FinCEN Director James H. Freis, Jr. “FinCEN will continue to closely track SAR data related to mortgage fraud and work closely with the U.S. Trustee’s Office, Federal Deposit Insurance Corporation, Federal Trade Commission, and National Association of Attorneys General to investigate and prosecute those perpetrating debt elimination scams and to protect consumers and financial institutions from scammers.”
Among the reasons for SARs, FinCEN noted fake documents and payment methods submitted by customers and third parties in attempts to have their mortgage obligations eliminated.
Other suspicious incidents included loan modification and foreclosure rescue scams, flopping and false claims of identity theft.
View the full FinCEN report.
Written by Elizabeth Ecker