Florida's First in Mortgage Fraud

Dec. 13, 2011 at 10:07 AM
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While activity increased on mortgage fraud cases being prosecuted in California, New York also saw acceleration in fraud and fraud activity in Minnesota zoomed, Florida's mortgage fraud index topped the list for the Third-Quarter 2011 Mortgage Fraud Index from MortgageDaily.com.

The index represents activity on civil and criminal cases. Victim lenders were deceived by fraudulent documentation or inflated appraisals. Cases were tracked from the mortgage fraud blog FraudBlogger.com.

"The Mortgage Fraud Index reflects current efforts by law enforcement officials to prosecute defendants who typically committed mortgage fraud three to five years ago," said Mortgage Daily founder and Publisher Sam Garcia said. "Many of the recently opened cases were uncovered by mortgage bankers who were forced to repurchase the loans."

Mortgage fraud cases increased significantly over 2010. The index fell 7 percent from the second quarter but climbed 16 percent from a year earlier. However, on a dollar basis, the aggregate balance of mortgage fraud cases was $1.3 billion -- lower than the second quarter and the third-quarter 2010.

The number of cases with activity in Florida climbed, giving it the worst state fraud index. California had the second-highest index, followed by Minnesota.

Based solely on the dollar amount of cases with third-quarter activity, California's $204 million was highest. New York was a close second, while Minnesota maintained its standing among the five-worst states.

"While mortgage fraud has historically been more prevalent in states hit hard by the housing crisis, Minnesota and New York -- two states that have not suffered as badly from foreclosures -- have recently emerged as active states for prosecutors," Mr. Garcia added.

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