The number of suspected cases of mortgage fraud reported by lenders was up 31 percent during the first quarter from a year ago, but most of those reports involved questionable activity on loans originated years ago.
Lenders are conducing additional reviews after receiving demands from Fannie Mae, Freddie Mac and others that they repurchase poorly performing mortgages, the Financial Crimes Enforcement Network (FinCEN) said in releasing its latest report on suspicious activity reports filed by lenders.
Of the 24,485 suspected cases of mortgage fraud reported by lenders, 79 percent involved activities that occurred more than 3 years ago. Six of the top 10 metro areas for mortgage fraud were in California.
A "substantial majority" of the reports involved activities that occurred in 2006-07, an indication that the industry is slowly making its way through the most problematic mortgages, FinCEN Director James H. Freis Jr. said in a statement. Which is not to say that fraud is not a problem on more recently originated loans.