Mortgage fraud suspicious activity reports up 7% in first half of 2010
Lenders filed 35,135 suspicious activity reports indicating mortgage fraud in the first half of 2010, up 7% from the same period a year ago, according to the Financial Crimes Enforcement Network. FinCEN, established by the Treasury Department in 1990, said the increase in reports can be attributed to more attention paid to older loans during repurchase requests. Earlier in the month, FinCEN proposed that nonbank residential mortgage lenders begin filing suspicious activity reports. In the first quarter of 2010, 78% of reported fraud activity actually took place more than two years before the report was filed. That's nearly double the 44% in the same period of 2009, which FinCEN says shows a continued focus on loans originated from 2006 to 2008. Most reports referencing bankruptcy fraud grew to 7% of all fraud reports, up from 1% in 2006 and 2007. "SARs are one of the most important sources of lead information for mortgage fraud investigations available to law enforcement," FinCEN Director James Freis, Jr. said. Write to Jon Prior.