Florida leads way as mortgage fraud soars

In Print: Tuesday, August 26, 2008

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NEW YORK — Reported incidents of mortgage fraud jumped 42 percent nationwide in this year's first quarter, with Florida reporting the highest number of cases, according to industry data released Monday.

Florida properties 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 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.

Mortgage fraud has represented about $1-billion in losses over the past decade, the Mortgage Bankers Association has said.

The increase in reported incidents comes as lenders raise credit standards to curb rising foreclosures. Critics say the industry has been lax in qualifying risky borrowers during the boom, which fueled an overheated housing market.

But the stricter requirements have done little to curb fraud.

"Tightening credit standards by itself doesn't eliminate fraud," said Merle Sharick of MARI.

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Florida leads way as mortgage fraud soars

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