Banks are re-examining loans that took place during the housing boom and are now finding problems which has resulted in a large jump of reported mortgage-fraud. Reports are showing an 88 percent jump in the second quarter according to the Treasury Department.
“Most of the mortgages suspected of fraud closed during the height of the real-estate bubble, the financial-crimes division said. The report added that 81 percent of the complaints involved suspicious activities before 2008, and 63 percent described what appeared to be fraud occurring four or more years ago – Source.”
The agency reports that 29,558 suspicious activity reports have been filed that may involve possible loan fraud. The same time last year 15,727 reports were filed.
“The Financial Crimes Enforcement Network said California had more reports of suspected mortgage fraud on a per-capita basis than any other state, followed by Florida and Nevada – Source.”
The Treasury thinks this recent spike in fraud reports may be in part to loan-repurchase demands from investors and what financial institutions are finding as they go through defaulted mortgages.
Financial Crimes Enforcement Network Director, James Freis Jr., believes that mortgage fraud still continues now but at a much lower level – Source.
What are your thoughts on this matter? Do you think mortgage fraud is on the rise or decline?