US mortgage fraud reports up 26%
WASHINGTON - The mortgage industry, applying far more scrutiny after a tidal wave of defaults, reported a record number of mortgage fraud incidents last year, with Rhode Island making its first appearance as the nation's top fraud hot spot.
The number of mortgage fraud reports among loans made last year grew 26 percent from a year earlier, according to a study released by the Mortgage Asset Research Institute.
More than 60 percent of mortgage fraud cases last year stemmed from falsified applications, while 28 percent came from tax returns or financial statements, and 22 percent came from appraisals, the study said. One fast-growing scheme, the report said, is coming from "foreclosure prevention specialists."
Rhode Island's place at the top of the report was a puzzle to its authors. The most prevalent type of fraud in that state was inflated home appraisals, while fraud on mortgage applications was the most common in the other states. 