The Associated Press reported that incidents of residential mortgage fraud committed by mortgage lenders rose at 7% last year. Although it rose at a much slower pace than the year before, this problem still exists in the mortgage industry.
Yesterday, the LexisNexis Mortgage Asset Research Institute released a study that the number of mortgage fraud incidents still rose in 2009, but not as much as it did in 2008, when such incidents shot up by 26%. Of the types of fraud committed, misrepresenting information on mortgage applications accounted for 59% of reported incidents, followed by appraisal-related fraud, which accounted for 33% of such incidents — up from 22% in 2008.
Where does mortgage fraud occur the most? According to LexisNexis, New York ranks second, but Florida is No. 1. The Sunshine State has earned this dubious honor three of the last four years.
The slowdown in the growth can be attributed to better reporting and policing within the mortgage industry for fraud activity, but, at the same time, the report said that more scammers are using the Internet to remain anonymous.
Denise James, LexisNexis Risk Solutions Director of Real Estate Solutions and co-author of the report, said it best:
“It remains critical for those in the mortgage industry to reassess their processes, work together by sharing information and reporting incidents of fraudulent activity, and ready themselves for more complex schemes in order to continue the fight against mortgage fraud.”
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