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Robert Trigaux

In Tampa Bay, we're still awash in mortgage fraud, feds say in new quarterly report



Wake up and good morning. The U.S. Treasury Department's financial cops, who work for the Financial Crimes Enforcement Network known as FinCEN, just issued their Second Quarter 2011 Analysis of mortgage loan fraud (MLF) suspicious activity reports (SARS). The findings? Financial institutions filed 29,558 MLF SARs in the second quarter of 2011, up from 15,727 MLF SARs reported in the same quarter of 2010.

That's nearly a doubling. Oh yeah. California and Florida remain the highest ranked states based on the number of mortgage loan fraud subjects, followed by New York and Illinois.

Our dubious achievement award: "Florida rebounded from its 5th ranking in the previous quarter to 2nd (excluding 2011 Q1, Florida has ranked at least 3rd in mortgage fraud per capita every quarter since 2007)," says the quarterly report.

Per capita, California and Florida cities dominate the list of metro areas for reported mortgage fraud subjects. Per capita, Tampa bay ranks 6th nationwide. Here are the top metro areas for reported fraud:

1. San Jose, Sunnyvale-Santa Clara, Calif.

2. Los Angeles-Long Beach-Santa Ana, Calif.

3. Riverside-San Bernardino-Ontario, Calif.

4. Miami-Fort Lauderdale-Pompano Beach, Fla.

5. San Diego-Carlsbad-San Marcos, Calif.

6. Tampa-St. Petersburg-Clearwater, Fla.

By county, Hillsborough and Pinellas counties ranked 10th and 12th nationwide, per capita, for their volumne of suspicious activity reports related to mortgage fraud.

According to FinCen, a large majority of the MLF SARs examined in the second quarter involved mortgages closed during the height of the real estate bubble. The upward spike in second quarter MLF SAR numbers is directly attributable to mortgage repurchase demands and special filings generated by several institutions. For instance, FinCEN noted that 81 percent of the MLF SARs filed during the quarter involved suspicious activities that occurred before 2008; 63 percent involved suspicious activities that occurred four or more years ago.

"We’re continuing to see a large number of SARs filed on activity that occurred more than two years ago, an indication that financial institutions are uncovering fraud as they sift through defaulted mortgages,” said FinCEN Director James H. Freis, Jr. “But we also continue to see indications of ongoing mortgage fraud activities."

FinCEN’s report, the agency says, raises awareness of the common scams that homeowners and lenders may encounter when arranging or modifying home financing. That includes:

* Misrepresenting income, occupancy, or debts and assets.

* Debt elimination scams.

* Scams involving the fraudulent use of social security numbers.

* Identity theft, false statements and false documents.

* Fraud involving short sales and appraisals.

* Forged rescission of notice of default.

* Advance fee scams, buy and bail schemes, and money laundering.

-- Robert Trigaux, Business Columnist, St. Petersburg Times

[Last modified: Thursday, September 29, 2011 7:53am]


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