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Mortgage Fraud News | Fraud Statistics | Fraud Index | Fraud Blog
Mortgage broker, originator and banker criminal cases. Real estate flipping and appraisal fraud. Mortgage fraud prevention, studies and analysis.

Florida Worst State in Mortgage Fraud Index

Q1-2012 Mortgage Fraud Index 1151

June 25, 2012

By staff

Q1 2012 Mortgage Fraud IndexQ4 2011 Mortgage Fraud Index

Although mortgage fraud continues to tie up law enforcement and judicial resources, the latest data indicate that activity is leveling off. But the worst state in the country -- Florida -- saw an increase. Several states with the biggest foreclosure problems are the same states with the highest levels of mortgage fraud.

The First-Quarter 2012 Mortgage Fraud Index from was 1151, inching up from 1141 in the fourth quarter. The index worsened from the first quarter of last year, when it was 990.

The highest index on record was 2790 in the fourth-quarter 2008.

The index, which is an offshoot of Mortgage Daily's Mortgage Litigation Index, reflects mostly criminal cases tracked during a given period by the mortgage fraud blog Included cases involve defendants accused of deceiving a mortgage lender to obtain loan approval. Foreclosure rescue schemes are typically excluded unless equity stripping that utilized straw buyers was involved.

While the Mortgage Fraud Index is not scientific, it does provide a reflection of the volume of mortgage fraud cases tying up law enforcement and clogging up the court system. It also is an indication of which states are seeing the most problems.

Index by Quarter
Period Index Loan Amounts # Cases
Q1 2012 1151 $1.8 billion 171
Q4 2011 1141 $1.8 billion 171
Q1 2011 990 $1.2 billion 150

The dollar volume of loans was unchanged from the prior period's $1.8 billion but well above the $1.2 billion in the first-quarter 2011. Dollar volume peaked at $2.7 billion in the fourth-quarter 2008.

The latest report tracked 171 cases, the same as three months earlier and more than the 150 tracked a year earlier.

"Activity has been fairly consistent as smaller mortgage bankers being hit with repurchases continue to uncover mortgage fraud committed during the housing boom years," according to Mortgage Daily Founder and Publisher Sam Garcia, who spent two decades in the mortgage business before going full-time with the news business in 2000. "We continue to see a close correlation between elevated fraud levels and high foreclosure rates in states like Arizona, California and Florida as well as Michigan and Ohio."

Mr. Garcia added that most of the cases involve crimes committed at least five years ago, an indication that improved technology and stepped-up mortgage fraud prevention efforts are reducing losses on recent vintages.

The highest state index was in Florida: 163. The Sunshine State has held the No. 1 title four out of the past five quarters.

A close second was California, where the index was 160. California, which is the state with the most foreclosure filings, consistently ranks among the five states with the highest mortgage fraud indices.

North Carolina's state index was among the five-highest for the first time since the Mortgage Fraud Index debuted in 2006.

Top States by Index
FL 163
CA 160
MN 70
OH 60
NC 53

On the basis of dollar amount, Florida ascended to the No. 1 spot with $260 million in cases traced, more than doubling from the prior quarter's $117 million. Florida has been among the top-five states in almost every report since the Mortgage Fraud Index was launched.

No. 2 North Carolina jumped from the 17th position in the fourth quarter. It was the state's first appearance among the five-worst states since the second-quarter 2008.

Top States by Total Amount
FL $260 million
NC $226 million
CA $208 million
NY $144 million
NV $134 million

Q1 2012 Mortgage Fraud Index 171
Q1 2012 Mortgage Fraud Index 171

Q1 2012 Mortgage Fraud IndexQ4 2011 Mortgage Fraud Index | Historical Fraud Index Data

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