Fraud connected to mortgage applications helped push overall filings of suspicious activity reports by financial institutions to a record level, according to the Financial Crime Enforcement Network.
FinCEN reported that mortgage fraud related SAR filings increased 23% in 2008, moving from 52,868 in 2007 to 64,816 in 2008.
FinCEN reported its analysis of the data suggests some possible reasons for the increases. Fraud may be reported in association with other suspected crimes, or a SAR may indicate several types of suspected fraud being perpetrated by the same suspect. For instance, of the total number of reported instances of identity theft SARs filed by depository institutions, approximately 35% were listed in combination with credit card fraud and/or one or more other violations such as check fraud or consumer loan fraud.
“While increases in reporting of suspected fraudulent activity could mean that there is an increase in fraud, it also reflects an increase in awareness within financial institutions detecting such activity,” said FinCEN Director James H. Freis, Jr. “For example, institutions that file SARs are more aware today of the types of mortgage fraud being perpetrated, and are more likely to file a SAR. I hope our data and our outreach to the industry continues to facilitate that.”
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