Foreclosure Rescue Fraud Up Despite Decrease in Fraud Reports

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This is really good news. The number of fraudulent mortgage applications are down by a large margin. Please read the article below and let me know what you think.

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The number of filings related to suspicious activity for mortgage loan fraud fell year-over-year, while mortgage fraud related to foreclosure rescue scams spiked, according to a recent report from the Financial Crimes Enforcement Network (FinCEN).

Last year, mortgage loan fraud (MLF) suspicious activity report (SAR) filings decreased to 69,277, down 25 percent from 92,561. However, the number of MLF SARs related to foreclosure rescue scams increased to 4,427, up 58 percent from 2,799 in 2011. In 2010, there were only 556 reports indicating some type of foreclosure rescue scam.

FinCEN explained the increase may be due to greater opportunities to target the distressed portion of the mortgage market, as well as greater attention to that type of fraud.

Overall, when observing suspicious mortgage fraud filings from 2001 to 2012, FinCEN found the bulk of filings referenced suspicious activity occurring in 2006 and 2007. For example, the number of filings for activity in 2006 and 2007 totaled around 137,000 each compared to around 9,500 for 2012.

“This is because most mortgage fraud SARs address fraud that occurred during loan origination, and 2006 and 2007 were the final years of the U.S. housing bubble and related loan origination,” the report explained.

According to more recent data from the agency filed through March 31, 2013, just 13 percent of suspicious activity reports had to do with appraisals, 6 percent dealt with loan modifications, and 3 percent were foreclosure-related. Meanwhile, 87 percent of filers indicated the reported activity fell in the “other” category, which was generally described as fraud related to loan origination and borrower misrepresentations.

To read the complete article – please use the link below.

Rescue Fraud Up

Explore posts in the same categories: Real Estate Market Trends

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