Florida No. 2 in mortgage fraud, Mortgage Asset Research Institute survey finds

Three years after the housing boom turned to housing bust, Florida still churns out fraudulent home loans at nearly three times the rate of the national average.

Though we're no longer tops nationally for tainted mortgages — that dubious honor now belongs to Rhode Island — borrowers continue to put one over on lenders.

Crooks' access to slicker technology, including computer programs that forge tax forms and pay stubs, have kept mortgage lenders on their toes.

And a larger chunk of the crooked activity involves foreclosure rescue scams, said Denise James, who helped conduct the 2008 state-by-state survey for the Mortgage Asset Research Institute.

"If in the past it was a crime of opportunity, now it's generally being committed as a crime of desperation," James said.

In Florida, the Tampa Bay area trailed Miami in its rate of fraud. In Miami, the most common trick was listing incorrect assets on a mortgage application, a reflection of that market's higher housing prices. Tampa fraudsters typically worked with inflated housing appraisals to flip a property for fast cash.

The overall national survey showed a 26 percent rise in fraud and misrepresentation from 2007 to 2008. The research institute, whose subscribers represent about 70 percent of loan originators in the United States, said the results don't prove fraud is exploding. Loan originations are a trickle of what they were in 2005. Greater vigilance on the part of lenders burned in the mortgage meltdown accounts for the much of the rising case volume.

"Fraud for housing" — people misrepresenting facts on their application to buy a private residence — makes up about 80 percent of the cases. "Fraud for profit," often a criminal collaboration involving straw buyers, makes up the remaining 20 percent. But the profiteers wreak most of the financial devastation estimated at $15 billion to $25 billion in 2008.

The Mortgage Bankers Association is pushing to simplify loans and trim excess paperwork on the theory that criminals thrive in the profusion of documents.

"Fraud always enjoys confusion," said John Courson, the association's chief executive.