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ICBA: Suspicious Activity Reporting Data Useful Against Mortgage Fraud

Washington, D.C. (April 3, 2008)—The Independent Community Bankers of America (ICBA) thanks the Financial Crimes Enforcement Network (FinCEN) for issuing a report today that can help community banks and their customers detect and prevent mortgage fraud.

"FinCEN making public its thorough and timely analysis of data collected as part of the suspicious activity report (SAR) process is exactly the type of feedback on SAR reporting ICBA has encouraged, so that all institutions and their customers can benefit from the information collected," said Karen Thomas, ICBA executive vice president and director of government relations. "FinCEN's analysis confirms that problems in mortgage markets were primarily caused by activities that community banks avoid such as minimal documentation and lack of due diligence. FinCEN also confirms problems were caused by inflated appraisals and rogue mortgage brokers."

Information on procedures that helped banks detect mortgage fraud can help community banks update their own procedures to protect the bank and its customers. More important, knowing what types of schemes are being used to perpetrate mortgage fraud, such as mortgage rescue scams and fraudulent investment schemes, is useful. Especially with the current conditions in the mortgage markets and the desire of the nation's community banks to provide solutions to borrowers, it is helpful for community banks to have information they can use to protect themselves and their customers.

"Identifying trends and patterns that indicate mortgage fraud helps community banks know what to watch for," said Thomas. "ICBA strongly encourages FinCEN to continue this type of analysis and feedback."