More than 4,500 Orange County homeowners—or one out of every 95—lost their homes to foreclosure from October 2011 to October 2012, according to a CoreLogic report published this week.

Across California, the numbers remained grim with one in 51 homeowners having their mortgages seized by lenders in the 12 month period. The nationwide average is one in 53.

However, the report also found that 3.2 percent of homes nationwide were in foreclosure, down from 3.6 percent in 2011. In California the numbers fell from 2.7 percent to 1.8 percent.

“As a result of completed foreclosures and alternative disposition methods, the foreclosure inventory has declined by 9 percent year-to-date,” said CoreLogic Chief Economist Mark Fleming. “This is good news for housing markets as we look forward to 2013.”

Nationwide, the five states with the highest percentage of homes in foreclosure are Florida, New Jersey, New York, Illinois and Nevada, respectively.

For the full report, click here.

Interthinx, a provider of risk-management data for the mortgage industry, released its Mortgage Fraud Risk Report for Q3 of 2012.

The report states that Florida has now surpassed Nevada as the riskiest state in the country for mortgage fraud.

California, meanwhile, came in at #5; however, California is home to 6 of the 10 riskiest metropolitan statistical areas (MSAs). This includes five of the 10 riskiest MSAs for appraisal fraud and eight of the 10 riskiest MSAs for employment/income fraud risk. This is not good news for honest property owners in those neighborhoods – in fact, it might make it harder for honest buyers to qualify for loans.

The report also lists Merced, CA as the riskiest MSA in the nation.

Read the full report here.

The Consumer Financial Protection Bureau and the Federal Trade Commission launched six formal investigations of lenders, suggesting the firms may have violated the law by releasing misleading mortgage ads. A dozen other firms received warning letters about their advertising practices this week.

The agencies announced Monday that the six companies under the bureau’s lens are being checked out for serious violations of the law. The probes focus on a myriad of advertising practices, especially those targeting senior citizens and members of the military.

The practices drawing scrutiny include alleged misrepresentations about the products potentially having government affiliations, inaccurate information about interest rates and potentially misleading comments about the cost of reverse mortgages and the amount of credit or cash available to a borrower.

The letters mailed and the launched investigations stem from the CFPB and the FTC’s review of 800 randomly selected mortgage ads released across the country. The ads were for mortgage loans, refinancing programs and reverse mortgages, the CFPB said. All of the ads reviewed came from newspapers, the Internet and mass-mail solicitations.

Any investigation that leads to a finding of fault will be tied back to the 2011 Mortgage Acts and Practices Advertising Rule, which governs mortgage advertising standards.

The CFPB and FTC claim some of the reviewed products for reverse mortgages promised no payments to borrowers even though reverse mortgages generally come with monthly payments or tax and insurance payments.

Other ads may have promised pre-approval for a certain loan amount even though the person had additional steps to take to become qualified.

Lynn Truong, aka Linh Thi Truong, 40, of Clovis, has been sent to prison for 21 months for a conspiracy to defraud lenders while buying homes to use to grow marijuana, according to U.S. Attorney Benjamin Wagner.

In April Ms. Truong pleaded guilty to one count of conspiracy to commit mail fraud. In pleading guilty, she admitted that she had conspired with her mortgage broker, Monique Nguyen, aka Monique Dzu Le, 62, to defraud GreenPoint Mortgage Funding Inc. in order to obtain a $545,000 loan to purchase a residential property in Willits.

She overstated her income, misrepresented her job title, and made other false statements.

The house was converted into a marijuana cultivation operation. Mendocino County Sheriff’s deputies seized 856 marijuana plants from the Willits property, and grow lights and equipment from Ms. Truong’s residence in Clovis. Ms. Nguyen was convicted of mortgage fraud in this case.

“You took a mammoth risk and lost,” said U.S. District Judge Lawrence O’Neill in handing down the sentence.

Now that the race for the White House is over, still-President Obama must move quickly to answer the housing-related challenges facing the federal government. Inman News looks closer at decisions that will have to be made in the coming weeks:

1. The “fiscal cliff”: The fiscal cliff is a series of tax increases and spending cuts that will go into effect unless U.S. lawmakers come up with an alternative plan to reduce the federal deficit by $1.2 trillion as required by the Budget Control Act of 2011. The spending cuts, known as “sequestrations,” would automatically go into effect on Jan. 2 and be split evenly between defense spending and domestic spending.

2. The mortgage interest deduction (MID): Revamping the mortgage interest deduction is one of the solutions proposed to head off the fiscal cliff and could be part of a broader plan to streamline the tax code by eliminating some loopholes and deductions. Some experts have said the MID, which costs the government about $90 billion a year, is unlikely to survive in its present form, though what would take its place, if anything, is unclear.

3. Mortgage debt forgiveness: Another homeowner tax break may be on the table in fiscal negotiations: the Mortgage Debt Relief Act of 2007, which is set to expire at the end of this year. The law exempts up to $2 million in mortgage debt forgiven by a lender in a short sale, loan modification or foreclosure from federal taxation. The law applies only to mortgage debt incurred to fund the purchase or improvement of a principal residence.

4. Qualified mortgages: Now that we know the Dodd-Frank Wall Street Reform and Consumer Protection Act is here to stay — presidential candidate Mitt Romney had vowed to repeal it — there are two controversial rules contained within the law that are waiting to be finalized: the qualified mortgage (QM) and the qualified residential mortgage (QRM).

Wanda Coleman, 59, formerly of Pauma Valley pleaded guilty Wednesday, Oct. 31, to mail fraud after the FBI busted a mortgage fraud ring that duped lenders into issuing more than $20 million worth of loans over the sale of three dozen homes in Orange, Riverside and San Bernardino counties.

Here’s how prosecutors said it worked: Coleman ID’d a property for sale; and struck a deal with the seller to pay far more than the asking price. A straw buyer, and others, would submit forged bank statements and other false documents — from employment records to asset information — to clinch the loan.

In exchange, Coleman or her companies collected the excess. Straw buyers would then default on the notes, homes slipped into foreclosure and lenders were left licking their wounds.

The fraud racked up more than $11 million in losses, federal agents say.

For her part, Coleman faces a maximum sentence that’s as long as the conventional fixed mortgage: 30 years.