Suspicious activity report filings involving mortgage fraud rose by 31% in the first quarter, largely as a result of the large number of repurchase demands by investors.
The Financial Crimes Enforcement Network said that the number of SARs based on potential loan fraud totaled almost 25,500 during the first three months of the year. And according to Fincen's analysis of the reports, nearly nine out of every 10 were based on activities which occurred more than two years prior to their filings.
Fincen Director James Freis attributed the rise to the additional reviews being conducted by lenders that have been requisitioned to take back poorly performing mortgages. "A substantial majority of reports involve activities which occurred in 2006-2007, an indication that the industry is slowly making its way through the most problematic mortgages," Freis said.
In its first-quarter analysis, the agency said a large number of SARs center on fake documents and payment methods that customers and third parties submitted to lenders in an attempt to have their obligations eliminated.
Also, a review of some 70 reports filed less than 90 days after the questionable incident tended to involve loan modification and foreclosure rescue scams, flopping and falsified claims of identification theft.
The latest report from Fincen also found that California dominated the mortgage fraud rankings.
Miami slipped to sixth place after five straight years as either No. 1 or No. 2.