The number of suspicious activity reports citing possible mortgage fraud fell in 2012 for the first time in over a decade, according to a report published Tuesday by the U.S. Treasury Department. Financial institutions reported 69,277 possible instances of the crime in regulatory filings submitted to the department's Financial Crimes Enforcement Network, or FinCEN, the bureau said. The number marks a 25 percent decline from the previous calendar year when the institutions filed 92,561 such reports. The 2012 total is also less than the number filed in 2010, when financial institutions sent 70,472 suspicious activity reports (SARs) citing mortgage fraud....
In a year when the number of enforcement actions issued by federal financial regulators fell by nearly half, Bank Secrecy Act-related penalties earned an unusual distinction. They declined by less than 14 percent.
Plans by the Obama administration to pursue civil and criminal cases against institutions that illegally promoted mortgage-backed securities could also bring scrutiny to anti-money laundering compliance officers.
A U.S. Treasury Department advisory detailing red flags of reverse-mortgage scams takes another step in placing more responsibility for identifying such frauds within banks' anti-money laundering programs, say consultants.
The current design of federally-mandated suspicious activity reports makes it difficult for banks to report important information tied to suspected mortgage fraud, say former law enforcement agents and consultants.