Mortgage Fraud Is Still a Big Growth Business.

Byline: Lew Sichelman

Las Vegas-There's no question mortgage fraud is a big-ticket item. But it may be bigger than most industry executives believe, speakers at the Mortgage Bankers Association's National Fraud Issues Conference said here. And the crime isn't going to go away anytime soon.

The last official count from the Federal Bureau of Investigation put the industry's annual loss due to mortgage fraud at $5 billion. But Scott Broshears, the special agent in charge of uncovering and prosecuting the loan fraud, said his agency is "probably easily investigating" crimes valued at double that amount.

But Merle Sharick, representing the Mortgage Asset Research Institute, trumped the G-man from Washington. He said that when all is said and done, losses in 2008 will run between $15 billion and $25 billion.

"Mortgage fraud is a giant and growing cause of losses," Mr. Sharick told the conference.

The MARI spokesman, who is now a vertical solutions consultant for LexisNexis, MARI's latest owner, also predicted that the number of suspicious activity report filings will continue to grow.

At last count - for the 12-month period ended June 30 - the Treasury Department's Financial Crimes Enforcement Network said financial institutions had filed 62,084 SARs. But Mr. Sharick said that number could grow to more than 75,000 within two years.