[In June 2012 Daily released its first-quarter 2012 Mortgage Fraud Index update. This report measured suspected mortgage fraud activity using suspicious activity reports, law enforcement actions and court filings. It showed that although fraud rates remained elevated, some states experienced modest declines as lenders improved controls.
### Top states for fraud
– **Florida** – remained highest due to foreclosure rescue schemes and identity theft.
– **California** – high volume of income and occupancy misrepresentation on loan applications.
– **New York** – rising cases of forged documents, appraisal inflation and straw buyers.
– **Illinois** – property flipping scams and straw buyer arrangements.
– **Michigan** – ongoing issues with foreclosure rescue fraud and fake borrower impersonation.
### Trends and observations
– Loan modification and foreclosure rescue scams continued to target distressed homeowners.
– There was a shift from origination fraud toward scams that exploit distressed borrowers and short sales.
– Prosecutors pursued more insider fraud cases involving lenders and mortgage brokers.
– Rising attention to short-sale fraud and property flipping as housing markets began to recover.
### Related resources
– [Fraud Index](/fraudindex)
– [Mortgage Fraud & Enforcement Index](/mortgagefraud-enforcement-index)
– [Mortgage Graveyard](/mortgage-graveyard)
– [Subprime Mortgage Crisis Analysis 2007](/subprimemortgagecrisisanalysis2007)
