Financial Crimes Enforcement Network

Financial Crimes Enforcement Network

Mortgage Loan Fraud



Financial Crimes Enforcement Network



Mortgage Loan Fraud

Financial Crimes Enforcement Network

Mortgage Loan Fraud

An Update of Trends based Upon

an Analysis of Suspicious Activity Reports

April 2008

Mortgage Loan Fraud



Financial Crimes Enforcement Network

ii

Mortgage Loan Fraud

Financial Crimes Enforcement Network

Table of Contents

Introduction

1

Executive Summary

3

Vulnerabilities Identified

5

Filings on Mortgage Brokers

5

Appraisal Fraud

5

Vulnerabilities in Specified Mortgage Products

6

Trend for Suspected Fraud in Cash-Out Refinance Loans

6

Trend for Suspected Fraud in Stated Income/

Low or No Document Loans

7

Home Equity Lines of Credit

8

Fraudulent Activities and Red Flags

9

Overview of Fraudulent Activities

9

Commonly Reported Variations of Mortgage Fraud

12

Elaborate Mortgage Fraud Schemes

14

Protective Measures

19

Effective Fraud Detection Measures Used by Filers

19

Other Protective Measures

20

Trends and Patterns in Total SARs Reporting

Mortgage Loan Fraud

21

Characterizations of Suspicious Activity

24

Primary Federal Regulators

26

Top Filing Institutions

27

Fraud Locations

27

Individual Taxpayer Identification Number (ITIN)

34

Mortgage Loan Fraud

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