The Financial Crimes Enforcement Network noted that the volume of suspicious activity reports related to foreclosure rescue scams almost doubled between 2011 and 2012, HousingWire reported April 15. There were 2,800 such allegations in 2011 and 4,400 last year.
However, reports of possible mortgage fraud have declined between 2011 and 2012, but such fraud remains a concern. In 2012, there were 69,000 allegations of mortgage fraud, a 25 percent decline from 2011 when 92,000 allegations were reported.
Speaking April 15 at the Mortgage Bankers Association Fraud Issues Conference in Hollywood, Fla., Jennifer Shasky Calvery, FinCEN director, said that the decline in mortgage fraud reports should not be interpreted as improvement across the board, HousingWire reported. She told the conference that even though mortgage fraud suspicious activity reports have declined in the last two years, scams are on the rise.
“Our analysis reflects that this could be partly a function of scammers finding opportunity in the distressed part of the mortgage market, as opposed to new loan origination,” Shasky Calvery said, HousingWire reported. “And it may also be the result of increased awareness of foreclosure rescue scams, given the focus on this issue during the past several years.”
In October 2012, the Financial Fraud Enforcement Task Force released results of a year-long initiative to bring scammers to justice. The task force, led by the Federal Bureau of Investigation, charged 530 criminal defendants — 172 of them were executives. HousingWire reported that investigated cases involved 73,000 homeowners with total losses of $1 billion.
FinCEN forms were updated to allow those filing suspicious activity reports to specify types of activity, such as reverse mortgage issues, loan modification scams and appraisal fraud. Many of the reports have been initiated by financial institutions.