March 7th, 2012
Econintersect: The Financial Crimes Enforcement Network reports that there has been a year-over-year increase of 20% in SARs (suspicious activity reports) related to mortgage fraud. This compares to a 14% increase for all other areas of financial fraud. Mortgage loan fraud constitutes 10% of all financial fraud activity tracked in the latest report. Of the six states with highest incidence of mortgage fraud on a per capita basis, four were those with the biggest housing bubbles: California (ranked 2), Nevada (3), Florida (4) and Arizona (6).
The following table lists the top 20 per capita mortgage loan fraud states.
The biggest change from 2010 to 2011 (third quarter reports) is in the percentage of fraud cases in the oldest records tracked. The following table has been annotated by Econintersect to highlight this.
The cases since 2006 have increased from 24% of all cases last year to 32% as of 3Q 2011. This implies that there may have been a rush to pursue these cases before statutes of limitation ran out. If so this will probably be something that occurs for only one year or 18 months because mortgage fraud is likely to have subsided as the housing bubble burst and sales (and mortgage issuance) dried up.
Mortgage Loan Fraud Update, 3rd Quarter 2011 (Financial Crimes Enforcement Network, March 2012)