Posted on Monday, December 27, 2010
The research firm CoreLogic has released its official assessment of the monetary toll mortgage fraud has had on the industry in 2010.
According to the CoreLogic Fraud Index, fraud losses for this year are estimated to be $11 billion. That figure is actually down from $14 billion in fraud losses during the 2009 calendar year and the lowest of CoreLogic’s assessments over the past five years.
The company’s data show that fraud losses hit a high point in 2006 at about $28 billion, just prior to the bursting of
the housing bubble, which incited a new era of more stringent underwriting standards and tighter credit.
CoreLogic says while the probable rate of fraud has increased by 20 percent since last year due to higher risk government loan programs, actual fraud losses are lower because origination volume is down by 26 percent.
The Financial Crimes Enforcement Network (FinCEN) reported in mid-December that suspicious activity reports (SARs) indicating mortgage loan fraud increased 7 percent in the first half of 2010.
Banks and thrifts filed 35,135 mortgage-related SARs from January to June 2010, up from 32,926 in 2009 during the same period.
FinCEN has proposed regulatory changes that would require non-bank residential mortgage lenders and originators to also report suspicious activity to the agency and establish their own anti-money-laundering programs to curtail losses.
CoreLogic’s annual loss estimate is based on the CoreLogic Fraud Index, which uses patented technology and predictive analytic models to analyze millions of loan data provided by lenders.
DS NewsBy: Carrie Bay