Magazine article Mortgage Banking

California Posts Highest Mortgage Fraud Risk in Q4

Magazine article Mortgage Banking

California Posts Highest Mortgage Fraud Risk in Q4

Article excerpt

In a new report, Agoura Hills, California--based Interthinx found California passed Nevada in terms of the risk of mortgage fraud in the state. Nevada had led all other states with the highest index reading for the previous five consecutive quarters, but California took over the top spot with an index value of 222 in the fourth quarter of 2009. That compared with Nevada's index reading of 220 in the final quarter of last year.

Interthinx publishes a quarterly Mortgage Fraud Risk Report, and the latest report found that most types of mortgage-related fraud were on the rise at the end of last year. The new report specifically found increases in the risk index for occupancy fraud, employment/income fraud and property valuation. A press release noted, "Despite a slight (4 percent) quarter-on-quarter decrease, the property valuation fraud risk index is up 40 percent over last year [2008] and up more than 100 percent from two years ago. Schemes involving short sales, REO inventories, wholesale flipping and refinancing by borrowers whose equity has been impaired by falling real estate values continue to drive this index. …

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