Banks reporting of suspicious activity involving possible mortgage fraud were up 88% in the second quarter of 2011, compared with the same quarter a year ago. Mortgage fraud reports to the Treasury Department have jumped 88% in the second quarter of this year. This is mainly because banks are reexamining loans from the housing boom and finding many problems. California has led the way in this trend as reported by Treasury's Financial Crimes Enforcement Network division in a quarterly report released Wednesday. The agency reported that the mortgage-collection arms of banks filed 29,558 suspicious activity reports involving possible loan fraud in the quarter that ended June 30. This compares with 15,727 that the mortgage servicers filed in the same quarter of 2010. Most of the mortgages suspected of fraud closed during the height of the real estate bubble, the financial crimes division said. The report added that 81% of the complaints involved suspicious activities before 2008, and 63% described what appeared to be fraud occurring four or more years ago. The Financial Crimes Enforcement Network said that California had more reports of suspected mortgage fraud on a per-capita basis than any other state. Six of the top 10 metropolitan-area hotbeds of mortgage fraud were in the Golden State. Fraud continues in new loans, albeit at a lower level and with misrepresentations of income, occupancy, or debts and assets the most common violations.