California Once Again Ranks as One of Worst States for Mortgage Fraud

Via the Sacramento Bee
By Robert Lewis
May 9, 2011

For the fifth year in a row, California ranks as one of the worst states for mortgage fraud — coming in at number three on the list of the worst states for 2010 behind New York and Florida, according to a report the LexisNexis Mortgage Asset Research Institute released this morning.

The overall number of mortgage fraud reports to the institute dropped 41 percent from 2009 to 2010, according to the research and data firm. That figure, however, isn’t cause for celebration just yet. The drop in real estate activity — sales and mortgage loans — likely contributed to the decline. Plus banks and other industry players are increasingly focusing on recovery and loss mitigation as opposed to detecting new fraud, according to the report.

The annual report is based on verifiable cases of fraud reported to the institute’s Mortgage Industry Data Exchange, or MIDEX. The exchange is a private data-sharing tool for mortgage companies, banks and other real estate industry players. These players report cases of fraud to the exchange and in turn use the database to do background checks on potential business partners.

The state ranking is based on the amount of fraud reports for a specific state as compared to the amount of real estate activity in that state. California had nearly two and a half times as many fraud reports as it should have given its share of the overall market of loans originated in 2010, according to the report.

LexisNexis a major research firm and the report is widely read annually. However, it is difficult to determine just how big a deal the findings are. The company won’t release statistics showing how many actual reports it receives a year. Instead LexisNexis provides percentage changes from the year prior.

To read the full report visit: http://solutions.lexisnexis.com/forms/MortgageFraudCaseReport12?source=RD_fraudreport

Read more: http://www.sacbee.com/2011/05/09/3613296/california-once-again-ranks-as.html#ixzz1LsvGsKTe