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Florida Tops List for Mortgage Fraud

Posted on May 01 By Francine Huff

Incidents of mortgage fraud rose 7% from 2008 to 2009, according to the Lexis Nexis Mortgage Asset Research Institute. Florida has the highest incidence of mortgage fraud in the U.S. It's followed by New York, California, Arizona, Michigan, Maryland, New Jersey, Georgia, Illinois, and Virginia.

Among the reasons for increased fraud are new opportunities to take advantage of consumers and improved technology that gives criminals more access to potential victims. Many people's desperation to be homeowners or live an affluent lifestyle also may play a role in fraud.

"The data suggests that in 2009 there was a 7 percent increase in the number of incidents of fraud reported to the LexisNexis Mortgage Asset Research Institute on top of the 26 percent increase reported in 2008," according to Jennifer Butts, LexisNexis Mortgage Asset Research Institute manager of Data Processing and co-author of the report. "While this is a noticeable increase, we believe that mortgage fraud is significantly understated, even during times of massive origination volumes."

Denise James, LexisNexis® Risk Solutions director of Real Estate Solutions and co-author of the report added: "Lenders are facing hurdles with compliance, loss mitigation and staving off additional financial losses due to poor loan performance."

Types of mortgage fraud varied. About 59% of mortgage fraud cases involved application misrepresentation, and this was the sixth year this topped the list. Appraisal and valuation misrepresentation accounted for 33% of cases. According to the report, the Midwestern states of Ohio, Illinois, and Michigan accounted for the highest concentration of appraisal fraud and misrepresentation.

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