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More Lenders Filed Suspicious Activity Reports in 2011

Financial institutions filed 31 percent more suspicious activity reports for mortgage fraud in 2011 than in the year before, according to the ""Financial Crimes Enforcement Network"":http://www.fincen.gov/ (FinCEN).


The agency released updates that showed lenders submitted 92,028 reports for suspected mortgage fraud activity in 2011, up from 70,472 seen in 2010.

The report tracked increases alongside declines from the fourth quarter, observing a 9 percent decrease in suspicious activity reports by yearend 2011.


""The FinCEN report shows we're seeing financial institutions spotting activity that appears to be fraud before it happens and in the process, helping to prevent it,"" FinCEN Director ""James Freis"":http://www.fincen.gov/about_fincen/pdf/bio_director.pdf said in a statement. ""Even though we're seeing the market work through its backlog of the book of business now in default, FinCEN data is revealing possible fraud that institutions are using to help defeat scammers.""

The agency noted ""significant improvement"" in mortgage lending due diligence since the financial crisis, finding that 40 percent of narratives detail rejections for applications, short sale requests, and efforts to eliminate debt, all as a result of suspected fraud.

Many of the suspicious activity reports stem from repurchase claims. Last year 84 percent of reported activities took place some two years before filing, while the year before saw only 77 percent.

With the exception of a county in Florida, the top five counties for suspicious activity all fell into hotspots around California.

When it came to states, the top five included California, Florida, Nevada, and Hawaii, as well as Washington, D.C., which FinCEN counted as a state for the report.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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