Industry NewsMortgage

Fannie, Freddie repurchase demands reveal fraud

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Demands by Fannie Mae and Freddie Mac that lenders repurchase loans made during the housing boom are driving an increase in reports of suspected mortgage fraud, government regulators say -- although short-sale "flopping" and fraud associated with loan modifications appear to be a continuing problem on newer loans.Two reports issued by the Financial Crimes Enforcement Network (FinCEN) show lenders and regulators filed 35,135 suspicious activity reports (SARs) related to mortgage fraud in the first half of 2010, up 7 percent from a year before.But 78 percent of the suspicious activity reported in the first quarter of 2010 occurred more than two years ago, FinCEN said, compared with 44 percent during the same period of 2009. There was a similar but less pronounced trend during the second quarter, when 74 percent of suspicious activity occurred more than two years ago, compared with 54 percent in the second quarter of 2010.The discovery of mortgage fraud through mortgage industry...