Mortgage fraud in the United States increased 5 percent in 2009 with an estimated $14 billion in phony frauds last year, the FBI said on Thursday.

According to FBI, it received 67,190 reports of mortgage fraud activity during 2009, a year in which foreclosure filings increased 120 percent from 2007 with 2.8 million properties involved.

FBI Director Robert Mueller said, "Mortgage fraud is an insidious crime that has devastating economic effects on families, communities and the nation."

California led the nation in the number of foreclosure filings while the Las Vegas area had the highest rate of foreclosures, with more than 12 percent of housing units receiving a foreclosure notice, the FBI said in its annual report on mortgage fraud.

Among the most common mortgage fraud scams is loan origination fraud and abuse of bankruptcy laws to avoid meeting mortgage obligations.

The FBI further said that loan origination, accounting for 51 percent of mortgage fraud, involves falsifying borrower information. (With Inputs from Agencies)