Fraud


  

The growing prevalence of mortgage loan fraud is being met by greater success on the part of the financial community at intercepting the fraud before loans are funded. A Financial Crimes Enforcement Network (FinCEN) report said the number of suspicious activity reports (SARs) relating to mortgage fraud increased 42% from 37,313 in 2006 to 52,868 in 2007 (FinCEN’s year-over-year data is tracked from April 1 through March 31).

In the same period, the suspected fraud was detected prior to loan funding in 31% of all cases resulting in SARs, up from 21% the previous year—an increase of almost 50%.

“This exemplifies how compliance with Bank Secrecy Act regulations is consistent with a financial institution’s commercial concerns,” said FinCEN Director James Freis in a press release.

The most common type of mortgage fraud was misrepresentation of income, assets and debt (43%). Identity theft in conjunction with mortgage fraud, though a small portion of all cases of mortgage fraud (3.45%), increased 96% in 2007.

The report, Mortgage Loan Fraud , is available at www.fincen.gov/MortgageLoanFraudSARAssessment.pdf .

 

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