“Last month President Bush reiterated his administration’s commitment to pursuing fraud and wrongdoing throughout the mortgage lending process,” said Jonathan L. Kempner, President and CEO of the MBA.  “Whether it’s fraud for housing or the more serious fraud for profit, people are deceiving lenders at an alarming rate, and more must be done to combat this problem.” 

The Federal Bureau of Investigation (FBI) has estimated that fraud cost mortgage lenders as much as $4.2 billion in 2006 alone.  This growing trend is troubling for many reasons, but most significantly because fraud-related costs and losses incurred by lenders are ultimately passed on to their customers, increasing the cost of homeownership for all borrowers.  The Financial Crimes Enforcement Network (FinCEN), a bureau under the U.S. Department of the Treasury has reported that the number of mortgage-related Suspicious Activity Reports (SARs) filed has increased an average of nearly 60 percent per year over the past four years.

MBA’s policy paper seeks to separate the issue of mortgage fraud from predatory lending and to provide policymakers with a roadmap to effectively combat the growing incidence of mortgage fraud.  In the paper, MBA discourages adding to or modifying the already comprehensive list of federal fraud statutes and instead recommends that Congress increase resources available to law enforcement and help facilitate the coordination of federal and state law enforcement of financial crimes.

“We do not need more federal laws to combat fraud.  Instead, we need a more coordinated effort and more resources to investigate and prosecute,” said Kempner.  “In addition to being illegal and costly, we know that fraud has also contributed to the recent rise in delinquencies and foreclosures, and the industry and government must step up our anti-fraud efforts to help curtail these related problems.” 

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 370,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.