WASHINGTON — The Financial Crimes Enforcement Network April Trends Report of analysis of Suspicious Activity Reports filed by financial institutions revealed a 44% increase in suspected mortgage loan fraud in 2006 compared to the preceding year. Suspected loan fraud was detected prior to loan disbursements in 31% of the mortgage loan fraud SARs filed between April 2006 and March 2006, compared to 21% filed in the preceding ten years.
Suspected identity theft associated with mortgage fraud was also found to increase 95.62% over FINCEN's last study, and such cases were usually for fraudulently transferred property titles. Mortgage brokers initiated the loans reported on 58% of the SARs sampled in the report, with examples of brokers acting as both active participants in the reported fraudulent activity and as intermediaries that did not verify information contained in loan applications.
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