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FinCEN reports jump in foreclosure rescue scams
VIENNA, Va. 6/18/10)--Suspicious Activity Reports (SARs) that note foreclosure rescue scams increased dramatically in 2009, according to the Financial Crimes Enforcement Network (FinCEN), and the agency said it is not clear whether the activity has skyrocketed or financial institution awareness of the fraud has increased. In its report entitled “Loan Modification and Foreclosure Rescue Scams—Evolving Trends and Patterns in Bank Secrecy Act (BSA) Reporting,” FinCEN said it analyzed more than 3,500 SARs filed from 2004 through 2009, 3,000 of which were filed in 2009. In addition to a dramatic rise in this type of fraud report, FinCEN said its analysis shows that the nature of foreclosure rescue scams has shifted during the period examined in the study. The earlier SARs identified persons or entities that purported to be loan modification or foreclosure rescue specialists, but who were later identified as fraudsters who targeted financially troubled homeowners with promises of assistance. “The scams involved the homeowners signing quit claim deeds, and resulted in loss of equity in or title to their property. The scammers used straw borrowers, who misrepresented income, employment, or occupancy, or provided other fraudulent information to deceive a new lender into making a new mortgage loan,” FinCEN noted. Later SARs zero in on scams that FinCEN said reflect “an evolution into advance fee schemes, in which purported loan modification or foreclosure rescue specialists promised to arrange modification of a homeowner’s mortgage for more favorable repayment terms”. Following receipt of large advance fees, scammers rarely, if ever, provided any service. FinCEN added: A variation of the advance fee scam involved phony debt elimination programs in which the homeowners paid advance fees and were given bogus documents, or were instructed to contact their lenders with specious assertions that the original mortgage debt was illegal. Use the resource link below to see the top 10 major metropolitan areas reporting these scams and to read more about the FinCEN report.
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