Mortgage Fraud Activity Posts First Drop in 16 Years


Reports filed by banks flagging suspicious activity in mortgage loans dropped for the first time in 16 years, falling nearly 30 percent last year, the Financial Crimes Enforcement Network reports.

Beginning in 1996, mortgage loan fraud had been the only suspicious activity report that saw rises each year. According to the Financial Crimes Enforcement Network, nearly 46 percent of all cases of potential mortgage fraud in the past decade have occurred in just the last three years alone.

The numbers are finally falling, due to greater detection. But banks also suffer from fraud perpetuated from within their institutions.

“The Federal Bureau of Investigation said while a majority of bank failures in recent years resulted from declining market conditions, insider abuse caused by bank officers and directors remains a factor in many loan fraud activities recorded in the past decade,” HousingWire reports. “Some of the activities that raised red flags include engaging in mortgage loan fraud by submitting misrepresentations of borrowers’ income, employment, credit, occupancy, and other requirements.”

Source: “Suspicious loan activity reports shrink first time in a decade,” HousingWire (May 8, 2013)

Read more

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