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The probable rate of mortgage fraud on loans written in 2010 increased 20% as the amount of loans originated continues to fall, according to data analytics firm CoreLogic (CLGX). The CoreLogic Fraud Index estimates losses on loans due to fraud will drop to $11 billion in 2010, down 21% from the $14 billion reported in 2009. It’s the lowest amount of losses since 2006 when CoreLogic found nearly $30 billion lost on mortgages written to much more lenient underwriting standards. But even though losses have dropped by dollar amount, the rate of fraud became more prominent due to higher-risk government loan programs, according to CoreLogic. Actual fraud losses are lower because the origination market is down 26% from a year ago. Lenders filed more than 35,000 suspicious activity reports on questionable loans during the first half of 2010. That's up 7% from the same period a year before, according to the Financial Crimes Enforcement Network. In December, FinCEN proposed a new requirement forcing nonbank residential mortgage lenders to begin filing the reports. Write to Jon Prior.

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