FinCEN: California, Nevada, Florida Lead Mortgage Fraud
Credit unions in California, Nevada and Florida may want to step up their efforts to warn their members about the dangers lurking in many offers to help them alleviate mortgage woes.
According to the Financial Crimes Enforcement Network, these states lead the nation in the number of suspicious activity reports filed about suspected incidents of mortgage fraud.
FinCEN reported that 19% of mortgage loan fraud reported in the first quarter of this year involved incidents observed in the past two years. Of this more recent activity, there were sharp increases in debt elimination schemes (14% of this reporting in first quarter of 2012 versus 9% in 2011) and other foreclosure rescue scams (8% of these first quarter filings versus less than 2% in 2011).
“We must remain vigilant against criminals trying to take advantage of struggling homeowners and markets trying to recover,” said FinCEN Director James Freis Jr.
Echoing similar results from 2011, 41% of those transactions were spotted and stopped before completion indicating the increased awareness and vigilance of financial professionals.
As an example of a newly reported suspected criminal activity, a financial professional suspected arson on a rental property insured for several times the mortgaged value. The subject repaid his mortgage loan with insurance proceeds and pocketed the additional insurance money, the network said.
“Suspicious activity reports reported to FinCEN are a tremendous tool to flag new criminal techniques, trends, and patterns, and to help identify and hold accountable those involved in organized and repeated criminal schemes,” Freis said.