As financial institutions implement the terms of the National Mortgage Settlement and deal with the ongoing foreclosure crisis, the FBI reports a “skyrocketing” increase in insider mortgage fraud schemes aimed at distressed homeowners.

“Current investigations and widespread reporting indicate a high percentage of mortgage fraud involves collusion by industry insiders” such as bank officers, lawyers and mortgage brokers, noted the FBI’s latest Financial Crimes Report. Overall, the number of reports of suspected mortgage fraud submitted to the federal government jumped nearly 33 percent in 2011.

The report notes that fraud against distressed homeowners has surpassed loan origination schemes as the number one mortgage fraud threat in many parts of the country.

The mortgage industry fraud that tarnished financial institutions in the “robo-signing” scandal put Notaries involved in processing foreclosures under scrutiny. The Financial Crimes Report findings show that Notaries should be on high alert for potential fraud including the backdating of loans, documents with blank spaces and increasing instances of borrowed or stolen Notary seals being used to perpetrate identity fraud in mortgage scams.