Mortgage Loan Fraud Reports Decrease 31% Yearly: FinCEN

For the first quarter of 2012, the number of Mortgage Loan Fraud (MLF) Suspicious Activity Reports (SARs) submitted decreased 31 percent to 17,651 over a one-year period, according to a ""Financial Crimes Enforcement Network"":http://www.fincen.gov/ (FinCEN) report.

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In the first quarter of 2011, 25,485 MLF SARs were submitted. The high level of submissions a year ago was fueled by mortgage loan repurchase demands, which prompted reviews of dated mortgages, according to FinCEN. While still occurring, this trend is diminishing.

In the first quarter of 2012, 82 percent of reported MLF SARs took place more than two years before the date of the filing, and 72 percent occurred more than four years before filing. A year ago during the first quarter, it was 85 percent and 42 percent, respectively.

Also, the percentage of those who submitted SARs for activity dated five or more years back increased to 44 percent compared to 17 percent a year ago.

According to FinCEN, the increase in very dated SARs could mean that those submitting SARs are working through bad loans originated in the 2006- 2007, when the housing crises began. During the first quarters of 2012 and 2011, a majority of reported activities actually began during or before 2008.

As for more recent activity, FinCEN reported sharp increases in debt elimination schemes and foreclosure rescue scams. Debt elimination schemes jumped to 14 percent this quarter compared to 9 percent in 2011, while foreclosure rescue scams increased from 8 percent compared to 2 percent in 2011.

""We must remain vigilant against criminals trying to take advantage of struggling homeowners and markets trying to recover,"" said FinCEN Director James H. Freis, Jr in a release. ""Suspicious activity reports (SARs) reported to FinCEN are a tremendous tool to flag new criminal techniques, trends, and patterns, and to help identify and hold accountable those involved in organized and repeated criminal schemes.""

California led the nation as the state with the most MLF SARs in terms of the number of reports per capita and by volume.

Florida had the second highest number of MLF subjects, followed by New York and Illinois.

Based on per capita rankings, Nevada came at second, jumping from the fifth spot in the fourth quarter of 2011. Florida was number three, followed by Arizona and New York.

Among the 50 most populous metropolitan areas, Los Angeles was number one based on the volume of reports submitted for the area. New York came in at second, followed by Chicago, Riverside, and Miami.

Los Angeles also took the number one spot for the number of reports per capita, followed by California cities Riverside and San Jose. Las Vegas and Miami took the fourth and fifth spots, respectively.

When categorizing the rankings by county, Los Angeles County was number for volume. Orange County was second, and Cook County took the third spot.

For per capita rankings, California counties continued to be high on the list, with five of the state's counties on the top 10 list. Orange County was number one, followed by Los Angeles; Gwinnett, Georgia; Nassau, New York; and Riverside, California.

Other California counties in the top 10 were San Bernardino and Santa Clara.

FinCEN is a bureau of the U.S. Department and its mission is to enhance the integrity of financial systems by facilitating the detection and deterrence of financial crime.