Mortgage fraud in the U.S. rises 31% in Q1; total of 25,485 complaints mostly relates to 2006-2007

Michelle Rivera

Michelle Rivera

Jun 29, 2011 – Industry Intelligence

LOS ANGELES , June 29, 2011 () – The U.S. Financial Crimes Enforcement Network (FinCEN) said Tuesday that reports of mortgage fraud grew by 31% in the first quarter of 2011, but the complaints of suspicious activity on mortgages primarily related to four years earlier, in 2006 to 2007, HousingWire reported June 28.

Several types of fraud were reported. The lapse of time indicates how long it has taken lenders time to investigate their mortgage assets, said FinCEN.

Mortgage complaints in the first quarter grew to 25,485, up from 19,420 last year, said FinCEN in its latest Mortgage Loan Fraud report released Tuesday, HousingWire reported.

The New York-based network also received a number of potential fraud reports in the first quarter about those attempting to get out from under their mortgages. Customers and third parties submitted false documents or defective payment methods to financial institutions.

Some reports of suspicious activity were filed relatively quickly--within 90 days after the loan activities. About 70 such reports related to loan modification, scams for foreclosure rescues, identity theft and “flopping,” HousingWire reported

In flopping, a property is sold at a low price to an intermediary who then sells the property at a higher price and takes the difference as profit.

FinCEN, part of the Treasury Department, released its latest report Tuesday, covering activity for the first quarter of 2011.

The primary source of this article is HousingWire, Plano, Texas, on June 28, 2011.

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