Number of reports for probable mortgage fraud in the US rose 7 percent in H1 2010, as banks scoured older mortgages for problems, according to a government report.
The Financial Crimes Enforcement Network (FinCEN) said banks have filed 35,135 reports of suspicious loans leading to mortgage fraud in the first six months of 2010, up from 32,926 reports last year.
The FinCEN, which is part of the US Treasury Department, gathered the reports on suspicious loans activity from banks to fight money laundering. The increase in mortgage fraud was driven by banks analysing older loans for fraud and underwriting problems.
Banks are trying to force companies that sold bad loans to buy them back. Sellers often guarantee that the loans meet underwriting standards and were not offered fraudulently.
So far about 78 percent mortgage fraud reports, on loans over two years old, have been recorded this year, up from the 44 percent recorded last year. FinCEN said it reflects a continued focus on home loans offered between 2006 and 2008, during the peak of the housing bubble.