California Mortgage Fraud Rising
Mortgage fraud cases rose significantly last year in California, which ranked No. 2 in the nation among other states for fraud incidents, a study revealed Wednesday.
In 2005, California home loan fraud ranked eighth nationwide in the annual report by the Mortgage Asset Research Institute. In 2004, the state ranked 19th.
The report tallied up to 28,372 incidents of mortgage impropriety nationwide in 2006, up 9 percent from 2005.
It didn’t break the number down by state, but noted that California’s rate of incidents was twice as high as the national average of incidents reported per state.
- Florida mortgage fraud topped the list for 2006.
- Michigan, Georgia and Utah rounded out the top five.
- New York also rose to No. 6, from No. 11 in 2005.
- The nationwide surge in fraud hit the West hard, as Colorado ranked ninth in the nation, Nevada was 10th and Arizona mortgage fraud 11th.
Stagnant and declining property values were blamed for California’s rise in frauds, according to Nick Larson, assistant vice president for the Mortgage Asset Research Institute.
“Declining property values make it harder for fraudsters to cover their tracks and sell a house quickly,” Larson said.
California mortgage loan lenders are also doing a better job of detecting fraud, he noted. Subprime loans also play a role in the number of cases seen.
The most common types of fraud in 2006 were in the realms of misstating one’s employment history as well as one’s stated income.
“We’ve been talking to anybody who would listen for years about the negative impact (of fraud) on consumers and neighborhoods and trying to upgrade the industry,” said Ted Grose, past president of the California mortgage brokers association.
“It’s no surprise California ranks high because it is the source of the most home mortgage loans in the nation.”
Grose said fraud would be dramatically reduced in the Golden State if the state’s laws against “fraud and lying” were enforced.
SOURCE: InsideBayArea.com