Analytics capture mortgage fraud trends

The Financial Crimes Enforcement Network (FinCEN) found through an analysis of suspicious-activity reports that suspected mortgage loan fraud rose 35 percent in the past year.

FinCEN, an agency of the Treasury Department, began an assessment of suspected mortgage loan fraud after noticing in its routine analysis a spike in suspicious-activity reports (SARs) containing certain characteristics of suspicious activity, a FinCEN spokesman said.

FinCEN uses analytics software to examine the reports of suspicious bank and financial-institution transactions under the Bank Secrecy Act. Individually or over time, these transactions could indicate money laundering, terrorist financing, fraud and other financial crimes.

FinCEN conducted an assessment of the trends and patterns of suspected mortgage loan fraud it had identified and which may be useful to law enforcement, regulatory authorities and financial institutions offering mortgage loan products. FinCEN began including mortgage loan fraud as a suspicious activity last year.

“FinCEN offers a unique analytical perspective because of its position at the intersection of law enforcement and the financial industry,” said FinCEN director Robert Werner last week in a statement.

Many of the SARs reviewed included more than one characterization of suspicious activity in addition to mortgage fraud. “False statement” was the most reported activity in conjunction with mortgage loan fraud, while “identity theft” was the fastest-growing secondary characterization reported.

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