Financial institutions filed nearly twice as many loan fraud suspicious activity reports in the second quarter of 2011 than in the same quarter last year, a report released today by the Financial Crimes Enforcement Network states. The Los Angeles metropolitan area ranks No. 1 for suspicious activity, with California and Florida being the top states for mortgage fraud overall.
Suspicious activity reports rose to 29,558 in the second quarter, up 88% from 15,727 reported in the same quarter of 2010, with much of the fraudulent activity relating to mortgages closed during the height of the real estate bubble.
“We’re continuing to see a large number of SARs filed on activity that occurred more than two years ago, an indication that financial institutions are uncovering fraud as they sift through defaulted mortgages,” said FinCEN Director James Freis, Jr. “But we also continue to see indications of ongoing mortgage fraud activities. FinCEN’s report released today raises awareness of the common scams that homeowners and lenders may encounter when arranging or modifying home financing.”
Misrepresenting income, occupancy, or debts and assets are among those scams, as are debt elimination scams and fraudulent use of Social Security numbers, FinCEN reports. False documentation, short sale and appraisal fraud and forged rescission of notice of default were among some less common scams.
California and Florida rank No. 1 and 2, respectively, with New York, Illinois and New Jersey as other areas of high fraud concentration by volume.
View the FinCEN fraud report.
Written by Elizabeth Ecker