Sep 30, 2011
Mortgage fraud to hit $7.4 billion this year; more reports pouring in
30 Sep 2011
Posted by Andrew Kantor
According to a new report from CoreLogic, its experts predict that $7.4 billion of mortgages in the U.S. will have some sort of fraud connected with them.
And that number is down almost 40 percent from last year ($12 billion worth of fraud).
Why the decline? Two big reasons: Fewer mortgages and better “pre-funding fraud controls.”
In a related story, the The Financial Crimes Enforcement Network released its Second Quarter 2011 Analysis (click for PDF) of “suspicious activity reports” from financial institutions. Interestingly, lenders filed almost 30,000 such reports in Q2 of 2011 — almost double the number filed in Q2 2010. (Click here for the news release.)
Do these two stories contradict each other? Nope. Many of the reports FinCEN is counting concern mortgages made years ago; 81 percent of the reports they received in this past quarter were about mortgages made before 2008.
I guess lenders are taking a good, hard look at the people they lent to — the barn door is closed, and now they’re following the hoofprints.