Even though the overall number of suspicious activity reports indicating mortgage loan fraud declined in the first half of 2012, the number of foreclosure rescue scams that occurred during this time is on the rise.
The Financial Crimes Enforcement Network said that through June 2012, financial institutions filed 2,360 foreclosure rescue-related SARs. If the current pace continues, FinCen projects the total number to surpass the 2,782 reported scams in 2011.
A foreclosure rescue scam targets distressed homeowners with promises to stop or delay the foreclosure process. Some of the scams require these homeowners to transfer their home’s title or make monthly mortgage payments to the supposed “rescuer.”
Geographically, foreclosure rescue SAR subjects were disproportionately concentrated in California. Of the 2012 2Q foreclosure rescue SARs, 49% resided in the Golden State, while 37% of all quarterly mortgage loan fraud SARs had a California address.
FinCen noted more foreclosure rescue scams are being filed because more people are currently aware of this scheme.
“FinCen’s June 2010 advisory encouraged SAR filers to use ‘foreclosure rescue scam’ in the narrative portion of the SAR,” the bureau of the U.S. Department of the Treasury said. “A number of well-publicized federal investigations, enforcement actions, reports, bulletins and guidance also likely increased public awareness and underscored the importance of preventing and reporting these scams.”
