Industry Loses $1 Bln to Fraud

The residential lending industry lost nearly $1 billion due to mortgage fraud last year, according to new figures compiled by the Federal Bureau of Investigation.

The FBI said fraud-related losses totaled $993 million in fiscal year 2006, compared to $1.01 billion the year before.

Meanwhile, late last week, FBI special agent William Stern disclosed that the agency in the past six months has established mortgage fraud task forces in Cleveland, Chicago and Indiana.

Speaking at the Mortgage Bankers Association's servicing conference in San Diego, he said the "hot spots" for loan fraud include California, Colorado, Florida, Georgia, Illinois, Ohio and Texas.

As of mid-February, the agency had 1,014 mortgage fraud cases pending compared to 721 in 2005.

Financial institutions filed 35,617 "suspicious activity reports" with the FBI last year, a 62% increase from 2005.

FBI spokesman Steve Kodak told National Mortgage News that although losses fell slightly last year from the year prior, the issue of mortgage fraud is still a problem. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com