Mortgage fraud cost the embattled US lending industry more than $1 billion last year and is on track to cost it even more in 2009, a report by the FBI shows.
Suspicious activity reports filed by financial institutions in 2008 showed losses of more than $1.4 billion, or a massive 83% more than in 2007, due to mortgage fraud.
'Losses reported in the first six months of fiscal year 2009 exceed the same period in fiscal year 2008 by $208m,' the annual report on mortgage fraud showed.
Financial institutions reported 63,713 incidents of mortgage fraud in 2008, or more than a third over the previous year. The FBI predicts that the number of cases of mortgage fraud will exceed 70,000 this year.
Fraudsters were often industry-insiders including mortgage brokers, lenders, property appraisers, underwriters, accountants, estate agents and others, according to the report.
They perpetrate the frauds because they are 'relatively low-risk with high-yield returns,' the annual report said.
'Despite increased scrutiny, many industry insiders will perpetrate fraud to maintain or increase their current standard of living,' it said.
It added that the ailing US economy is likely to force the fraudsters to look for new ways to scam people and the industry out of money.