FinCEN Mortgage Loan Fraud report

[eikoph]

I came across an interesting report on the website of Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department. The report is titled “Mortgage Loan Fraud: An Industry Assessment based upon Suspicious Activity Report Analysis” and is dated November 2006.

[eikoph]

Related follow-up:

In January 2007, the Federal Deposit Insurance Corporation (FDIC) apparently distributed a letter regarding the FinCEN Mortgage Loan Fraud report to “FDIC-Supervised Banks (Commercial and Savings)”.

Their Financial Institution Letter FIL-4-2007 lists the highlights of the report:

• FinCEN analyzed a sampling of SARs to identify any trends or patterns of suspected mortgage loan fraud.
• The assessment reveals that suspected mortgage loan fraud in the United States has risen substantially in the past year.
• Many of the SARs reviewed included more than one characterization of suspicious activity in addition to mortgage fraud. “False statement” was the most reported activity in conjunction with mortgage loan fraud, while “identity theft” was the fastest growing secondary characterization reported.
• Mortgage brokers or correspondent lenders initiated loans in nearly 37 percent of the sample.
• Emerging mortgage fraud schemes identified include asset rental and debt elimination fraud.
• The assessment may be useful to law enforcement, regulatory authorities and financial institutions offering mortgage loan products.

Their suggested routing (at the banks) is to “Chief Executive Officer, Chief Loan Officer, and Security Officer”.

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