An increase in repurchase demands is prompting an increase in the number of mortgage fraud reports.
First-half 2010 filings of Suspicious Activity Reports totaled 35,135, the Financial Crimes Enforcement Network — or FinCEN — reported Tuesday. Activity rose from approximately 34,264 filings in the second half of last year.
SARs filings were also worse than 32,926 filings during the first-half 2009.
The rise in filings was, in part, attributed to increased attention on older loans that have been repurchased.
More than three-quarters of filings during the first three months of this year were for mortgage fraud that occurred over two years prior. A year earlier, only 44 percent of filings were made on two-year-old loans.
The report indicated that references to bankruptcy were made in 7 percent of SARs filings, jumping from just 1 percent in 2007 and 2006.
FinCEN said “short sale” was mentioned in 827 first-quarter SARs filings, while “broker price opinions” appeared 41 times.
Both terms are associated with “flopping,” where a “foreclosed property is sold at an artificially low price to a straw buyer, who quickly sells the property at a higher price and pockets the difference.”
