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» FORECLOSURE RESCUE FRAUD RISES DESPITE DECREASE IN REPORTED FRAUD ACTIVITY The number of filings by FinCEN, account for related to suspicious activity for approximately 46 percent of Suspicious activity mortgage loan fraud fell yearreports citing mortgage the past decade's suspected over-year, while mortgage fraud mortgage fraud filings. loan fraud dropped 25% However, the agency notes related to foreclosure rescue in 2012, but filings related that suspicious activity is scams spiked, according to a report released by the Financial often only recognized and to foreclosure rescue Crimes Enforcement Network reported years after loan scams spiked 58%. (FinCEN) last month. origination, when a review In 2012, suspicious activity of origination documents is reports (SARs) citing mortgage loan fraud prompted by a loan default, repurchase demand, decreased to 69,277, down 25 percent from or other factors. 92,561. However, the number of SARs related As a result, many mortgage fraud SARs are to foreclosure rescue scams increased to 4,427, filed much later than the date that the suspicious up 58 percent from 2,799 in 2011. In 2010, there activity actually began. In 2012, for example, 57 were only 556 reports indicating some type of percent of SARs cited mortgage loan activities foreclosure rescue fraud might be at play. that occurred more than five years before the FinCEN explained the increase may be due SAR was filed. to more opportunities to target the distressed When observing suspicious mortgage fraud portion of the mortgage market, as well as filings from 2001 to 2012, regardless of the greater attention to that type of fraud. filing date, FinCEN found the bulk of filings Overall, the last three years of mortgage fraud referenced suspicious activity in 2006 and 2007. SARs, if counted by the date they were received The number of filings over the period citing VISIT US ONLINE @ DSNEWS.COM activity from 2006 and 2007 totaled about 274,000—137,000 from each year—while filings pointing to 2012 activity added up to just 9,500. "This is because most mortgage fraud SARs address fraud that occurred during loan origination, and 2006 and 2007 were the final years of the U.S. housing bubble and related loan origination," FinCEN explained in its report. According to more recent data from the agency filed through March 31, 2013, just 13 percent of mortgage-related SARs referenced possible appraisal fraud, 6 percent dealt with loan modifications, and 3 percent were foreclosure-related. Meanwhile, 87 percent of filers indicated the reported activity fell in the "other" category, which was generally described as fraud related to loan origination and borrower misrepresentations. KNOW THIS Auction.com Research "believes it is official that Canada's housing market is ... in danger of correction, [with] home prices ... surpassing the height of the U.S. housing bubble." 69

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