A comparison of quarters indicates that the possibility of mortgage fraud worsened. While there were plenty of markets that improved, deterioration in other markets offset the gains.
The report found that possible fraudulent activity was detected on 1.1 percent more U.S. mortgage applications during the third quarter of last year than in the second quarter.
The potential for mortgage fraud declined 20 percent in the Champaign-Urbana, Ill., MSA. That was the best improvement of any area.
The findings were announced Monday by Kroll Factual Data, which examined metropolitan statistical areas with at least a thousand applications per quarter.
The potential in Bridgeport-Milford, Conn., was down 19 percent, the second-best performance. The San Francisco market saw an 18 percent drop, as did Birmingham, Ala., while the potential for real estate lending fraud Cleveland was 17 percent lower.
But Kroll President Rod Bazzani noted in the report that declines in some MSAs were offset by increases in others.
Among troubled areas was Flint, Mich., where potential mortgage fraud shot up by half from the second quarter — more than any other market.
Columbia, Mo., saw a 30 percent jump, while Lancaster, Pa., was up 29 percent; Tacoma, Wash., worsened by 26 percent; and Santa Fe, N.M., climbed 24 percent.
“This spike in potential fraud is troubling, coming at the same time the mortgage industry is beginning to turn the corner,” Bazzani warned in the report. “More importantly, the fact that red flags are rising in every area of the country highlights the continued need for lenders to remain vigilant against fraud.”
