Florida is Number 1 in Mortgage Fraud

According to a recent report by the Mortgage Asset Research Institute, mortgage fraud nationwide jumped 42 percent in the first quarter of 2008, with Florida reporting the highest number of cases.  Florida accounted for 24 percent of all material misrepresentations for loans originated during the first quarter of 2008, according to the institute’s press release.

California is ranked second, followed by a three-way tie for third among Illinois, Maryland and Michigan. The majority of reports submitted for Florida and California involve properties near the coastline, with Miami and Los Angeles accounting for half of all misrepresentations reported in the top two states.

The report concludes that mortgage fraud is expected to significantly grow and evolve. It recommends the mortgage industry continue to strengthen its due diligence, including an analysis of the borrower’s identity, as well as the players involved in each of the real estate roles, whether outsourced or in-house.

“How a lender accepts or rejects a loan application at the front door is often all a criminal needs to see how much further he or she may push through the loan process. . . Mortgage fraud inflicts damage to profits, reputations and consumer confidence. Today, it is wise to ensure you know the customers, employees and vendors involved in every loan transaction — doing this early in the process can result in overall protection from tainted pipelines and hidden threats to loan quality.”