Suspicious Fraud Activity Up 4 percent in 2009

November 2, 2010

The Financial Crimes Enforcement Network (FinCEN) released its 2009 Mortgage Loan Fraud (MLF) study which found the number of mortgage fraud suspicious activity reports (SARs) filed in 2009 grew 4 percent from 2008 in 2008. FinCEN also reported that just looking at the fourth quarter of 2009, mortgage fraud SAR filings increased 6 percent over the same period in 2008.

Consistent with recent years, 9 percent of all SARs filed in 2009 indicated MLF as an activity characterization. However, looking at just the fourth quarter, this proportion rose to 11 percent.

In addition to the increase in SAR MLF filings, the analysis shows an increase in the prevalence of post origination loan reviews by a variety of mortgage market businesses other than mortgage lenders. Mortgage loan purchasers and providers of mortgage insurance, certificate insurance, or similar credit enhancement have taken an increasing role in detecting potential fraud or misrepresentations.

“FinCEN is an active participant in the fight against mortgage fraud working closely with local, state and federal law enforcement, assessing potential vulnerabilities and sharing information that can lead to successful prosecutions,” said FinCEN Director James H. Freis, Jr. “These numbers tell us that we must remain vigilant and continue taking action to focus resources and hold accountable perpetrators of mortgage fraud.”

The report also lists where MLF SARs are most common by state by county and by metropolitan area. The following table shows the Metropolitan Statistical Areas with the most SAR MLF filings and the number of mortgage loan fraud SARs that were filed in 2009.

Top Metropolitan Statistical Area 2009 2009 Q4
1 Los Angeles-Long Beach-Santa Ana, CA: 10,656 3,103
2 Miami-Fort Lauderdale-Pompano Beach, FL: 10,089 3,003
3 New York-Northern New Jersey-Long Island, NY-NJ-PA: 7,214 2,165
4 Chicago-Naperville-Joliet, IL-IN-WI: 5,552 1,591
5 Riverside-San Bernardino-Ontario, CA: 3,643 1,024
6 Washington-Arlington-Alexandria, DC-VA-MD-WV: 3,538 877
7 Phoenix-Mesa-Scottsdale, AZ: 3,500 1,051
8 Atlanta-Sandy Springs-Marietta, GA: 3,476 875
9 San Francisco-Oakland-Fremont, CA: 3,068 831
10 Detroit-Warren-Livonia, MI: 2,712 663

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