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FinCEN: Mortgage Loan Fraud Reports See Yearly Increases Since 1996

Out of seven different categories of fraud reported by depository institutions (banks, thrifts, credit unions), mortgage loan fraud (MLF) saw the second great increase from 2010 to 2011 and had the highest number of suspicious activity report (SAR) filings, according to a report from the ""Financial Crimes Enforcement Network"":http://www.fincen.gov/ (FinCEN).

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MLF SARs increased nearly 31 percent to 92,028 in 2011 compared to 70,472 in 2010. Consumer loan fraud saw an even greater increasing, spiking 127 percent after reaching 32,285 filings in 2011 compared to 14,194 SARs in 2010.

The other two categories which saw increases during the same time period were debit card fraud and wire transfer fraud, both of which increased 9 percent.

On the other hand, commercial loan fraud decreased by 12 percent, while check card fraud (-5 percent) and check fraud (-3 percent) also saw a decline during same period.

The report also noted that MLF is the only FinCEN category that increased every year since 1996.

The upward climb in the number of mortgage fraud reports is partly attributed to mortgage repurchase demands and special filings from several institutions, according to the report.

When suspicions of fraud activity are reported, the institutions may submit the files way past the actual date the suspicious activity occurred.

Overall, 794,710 SARs were filed by depository institutions in 2011, compared to 697,389 in 2010.

About Author: Esther Cho

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