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In the second quarter of this year, ""filers submitted 17,476 Mortgage Loan Fraud Suspicious Activity Reports"":http://www.themreport.com/articles/mortgage-fraud-reports-down-in-q2-as-total-suspicious-activity-increases-2012-10-09 (MLF SARs), marking a 41 percent yearly decrease, according to a report from ""Financial Crimes Enforcement Network"":http://www.fincen.gov/ (FinCEN) Tuesday. Even though reports of MLF activity made a steep drop and continue to fall year-over-year, reports of foreclosure rescue scams have been increasing.
[IMAGE]A foreclosure rescue scam is counted as any scheme targeting homeowners facing foreclosure or default on their mortgages.
During second quarter of 2012 (April through June), FinCEN saw 1,325 MLF SARs containing the term ""foreclosure rescue"" in the narrative part of the form. The figure accounts for 8 percent of all 17,476 MLF SAR reports.
[COLUMN_BREAK]If foreclosures rescue SARs continue at the current pace into the remainder of 2012, the yearly total for foreclosure rescue reports will be significantly higher than 2011.
Based on the 2,360 foreclosure rescue SARs received in the first half of this year, FinCEN estimates 4,720 foreclosure rescue SARs for 2012. In 2011, there were 2,782 foreclosure rescue SARs and only 554 in 2010.
California had an especially high concentration of foreclosure rescue SARs. About half (49 percent) of the second quarter foreclosure rescue SAR subjects were in California. The state also accounted for 37 percent of all MLF SAR subjects.
FinCEN offered explanations for the national spike in foreclosure rescue SARs, one of which was increased awareness through reports, bulletins, and guidance from various government agencies. FinCEN also encouraged filers to use ""foreclosure rescue scam"" in the narrative portion of the report in its June 2010 ""advisory"":http://www.fincen.gov/statutes_regs/guidance/pdf/fin-2010-a005.pdf, and explained the effort ""facilitates the identification and isolation of pertinent SARs by FinCEN analysts and agencies with access to FinCEN's database.""
In addition, trends in the real estate market may have created opportunities for fraud as homeowners in distress seek relief.
FinCEN also noted suspicious activity amounts ran much higher for foreclosure rescue SARs compared to general MLF SARs in the second quarter. The report revealed foreclosure rescue related SARs had a median amount of $345,000 compared to $265,500 for all MLF SARs.
