Fraud & Investigations

South Florida: No. 1 for mortgage fraud

Posted on Monday, April 4, 2011

The financial meltdown has not slowed loan scams, as South Florida ranked first in mortgage fraud suspicious activity reports (SARs) per capita, according to the latest report from the Financial Crimes Enforcement Network (FinCEN).
Mortgage fraud can be added to the list of other financial crimes for which South Florida leads the nation, including Medicare fraud, pill mills and auto insurance fraud.
South Florida had 11,833 SARs reports in 2010, ranking first per capita. Orlando was sixth per capita.
South Florida was third in SARs by volume, behind New York and Los Angeles.
On a county level, Miami-Dade County was first in SAR filings per capita, Broward County was third and Orange County was fourth.
The whole state of Florida ranked second in both the volume of SAR filings (behind California) and filings per capita (behind Nevada).
FinCEN said one of the common mortgage fraud schemes is “flopping.” That’s when a distressed property is sold at an artificially low price to a straw buyer, who quickly resells it at a higher price and pockets the difference. Other schemes included fraud in seeking government-sponsored mortgage relief and abuse of the bankruptcy court process.
Nationwide, financial institutions filed 70,472 SAR reports in 2010, up from 57,507 the year before. The number has increased every year for the past decade, starting at 4,695 filings in 2001. Most of the activity reported on occurred two to four years before the filings.
South Florida Business Journal - by Brian Bandell


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