The South Florida region leads the nation in the number of mortgage fraud suspicious activity reports (SARs) filed by lenders to the Treasury Department's Financial Crimes Enforcement Network (FinCen), according to the U.S. Department of Justice.

Lenders filed more SARs in South Florida than any other region in the country, helping to propel Florida - with a population of some 18.5 million making it the fourth largest state in the nation - to the No. 2 ranking behind only California, the most populated state in the union, according to U.S. Financial Crimes Enforcement Network.

The total number of mortgage fraud SARs filed in South Florida was not disclosed. However, the FBI did reveal that nearly 67,200 mortgage fraud SARs were reported in 2009, a 874 increase from about 6,900 SARs filings in 2003, according to the Miami Herald.

“The mortgage fraud crisis cannot be ignored. Mortgage fraud puts lenders at risk, and forces homeowners to confront the real possibility of foreclosures, or worse, the loss of their homes,” U.S. Attorney for the Southern District of Florida Jeffrey H. Sloman said in a statement. “Nowhere is the problem more serious than here in Florida. Since September 2007, our mortgage fraud initiative has resulted in the prosecution of 282 individuals at all levels of the mortgage process, resulting in more than $343,669,434 in fraudulent mortgage loans.

"We will continue to do our part to investigate and prosecute these fraudsters, in the hopes of stemming the tide of fraud that has swept the mortgage industry.”

Sloman participated in a Financial Fraud Enforcement Task Force meeting hosted Wednesday in Miami as part of a nationwide tour dubbed the Mortgage Fraud Summit. 

The meeting attracted a number of key federal, state, and local players who have been asked by President Obama's administration to get the situation under control.

The Miami summit featured Florida Attorney General Bill McCollum, Executive Director of the Financial Fraud Enforcement Task Force Robb Adkins, FinCEN Director James H. Freisa, Jr., and representatives from the U.S. Secret Service, Federal Deposit Insurance Corporation, and the Miami-Dade Police Department.

"The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes," according to a statement from the Financial Fraud Enforcement Task Force.

Mortgage fraud is seen as a key reason why the number of foreclosures have spiked in South Florida and around the country.

In 2009, lenders filed 97,000 foreclosure filings in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties compared to 76,000 actions in 2008 and 33,000 in 2007, according to the Condo Vultures® Foreclosure Database.

The 200,000 foreclosure filings in the last three years have translated into 66,000 bank-owned properties in South Florida, according to CondoVultures.com. 

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