US mortgage fraud rate increases 42 percent
NEW YORK - Reported incidents of mortgage fraud jumped 42 percent nationwide, with Florida reporting the highest number of cases, according to industry data released yesterday.
Properties in the Sunshine State accounted for nearly a quarter of all mortgage fraud incidents, the Mortgage Asset Research Institute said. California ranked second, followed by a three-way tie for third among Illinois, Maryland, and Michigan.
The report is based on data submitted by MARI subscribers about loans that were originated in the first quarter of this year and have since been classified as fraudulent.
The most common mortgage fraud cases included misrepresenting income, employment history, and debt and assets. Maryland, for example, had an unusually high percentage - 69 percent - of its cases involving tax return and financial statement misrepresentation.
Fraud has represented about $1 billion in losses over the past decade, the Mortgage Bankers Association has said.
The increase comes as lenders raise credit standards to curb foreclosures. Critics say the industry was too lax in qualifying risky borrowers during the boom. But stricter requirements have done little to curb fraud.