FinCEN SAR Activity Review, Trends, Tips & Issues, Issue 10
FinCEN SAR Activity Review, Trends, Tips & Issues, Issue 10
FinCEN SAR Activity Review, Trends, Tips & Issues, Issue 10
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Mortgage Fraud Hot Spots<br />
The Federal Bureau of Investigation (FBI) reports that 26 states have<br />
significant mortgage loan fraud problems. 15 The FBI indicates that the top<br />
<strong>10</strong> “hot spots for mortgage fraud are California, Colorado, Florida, Georgia,<br />
Illinois, Michigan, Missouri, Nevada, South Carolina, and Utah.” This<br />
ranking is based on the number of active federal law enforcement cases<br />
involving mortgage loan fraud. <strong>SAR</strong>s indicate that the largest concentration<br />
of fraud is found in the entire eastern region of the United States. Other “hot<br />
spots,” according to those filings, include Arizona and Texas. Enacted and<br />
proposed laws aimed at thwarting mortgage loan fraud are a step in the right<br />
direction.<br />
Top Suspect Occupations Associated with Mortgage Loan<br />
Fraud Reported<br />
• Finance-related occupations were the most commonly reported suspect<br />
occupation associated with mortgage loan fraud with 8,345 (13.62 percent)<br />
filings. Accountants, mortgage brokers, and lenders were included as<br />
finance industry occupations.<br />
• Business-related occupations were the next highest reported suspect<br />
occupation associated with mortgage loan fraud with 3,455<br />
(5.64 percent) filings.<br />
Types of Fraudulent Mortgage Loan <strong>Activity</strong> Reported<br />
• Falsification of the Loan Application was described in 543 (nearly 52<br />
percent) of the sampled narratives.<br />
• Identity Theft/Fraud was described in 225 of the sampled narratives<br />
(21 percent).<br />
• Misrepresentation of Loan Purpose or Misuse of Loan Proceeds was<br />
described in 142 of the sampled narratives (14 percent).<br />
• Appraisal Fraud was described in <strong>10</strong>0 of the sampled narratives<br />
(9.5 percent).<br />
• Fraudulent Flipping was specifically identified in 22 of the sampled<br />
narratives (2 percent).<br />
15 U.S. Department of Justice, Federal Bureau of Investigation, Financial Crimes Section, Financial<br />
Crimes Report to the Public, “Mortgage Loan Fraud”, D12, May 2005, http://www.fbi.gov/publications/<br />
financial/fcs_report052005/fcs_report052005.htm. (Accessed September 28, 2005).<br />
15
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