Industry NewsMortgage

Suspected mortgage fraud up 42% in 2007

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Banks and other financial institutions filed 52,868 suspicious activity reports involving suspected mortgage fraud in 2007, an increase of 42 percent over the year before, financial regulators said in their first report on mortgage fraud since November 2006. The Financial Crimes Enforcement Network said suspicious activity reports were also up 44 percent in 2006, to 37,313, with the greatest increases in Illinois (75.8 percent), California (71.3 percent), Florida (53 percent), Michigan (51.5 percent), and Arizona (48.7 percent) One reason for the increase, FinCen said, may be that lenders are identifying more cases of suspected fraud prior to loan approval. Suspected fraud was detected prior to loan disbursements in 31 percent of the mortgage loan fraud SARs filed between April 1, 2006, and March 31, 2007, FinCen reported, compared with 21 percent during the preceding 10 years. Mortgage brokers initiated the loans reported on 58 percent of a sample of 1,769 suspicio...