June 29, 2011 - There was a notable uptick in the number of overall suspicious activity reports filed in the first quarter from a year ago, with citations of mortgage loan fraud driving the increase, the Financial Crimes Enforcement Network said Tuesday.
According to FinCEN’s latest Mortgage Loan Fraud Update publication, a total of 186,331 SARs were filed in the first quarter, 10 percent more than the 168,790 reported in the same period last year. Mortgage loan fraud SARs represented 14 percent of all SARs filed in the first quarter of 2011, up from 12 percent the previous year.
The report also indicates that mortgage servicers are working their way through the filing process of a large number of SARs that has built up in recent years. Of all the mortgage-fraud-related SARs reported in the first quarter, 86 percent cited activities that occurred more than two years before the filings took place; that compares with 78 percent in the first quarter of 2010. Even more notably, FinCEN reported that 42 percent of the mortgage loan fraud SARs cited activities that occurred four or more years prior to the filings; that was true for only 13 percent filed in the same period last year.
FinCEN Director James Freis said the findings show that “the industry is slowly making its way through the most problematic mortgages.” He added that the agency will closely monitor SAR data related to mortgage fraud and work closely with the U.S. Trustee’s Office, FDIC, Federal Trade Commission and National Association of Attorneys General “to investigate and prosecute those perpetrating debt elimination scams and to protect consumers and financial institutions from scammers.”