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Top 10 states for mortgage fraud

By Judy Martel · Bankrate.com
Tuesday, October 8, 2013
Posted: 12 pm ET

Mortgage fraud rose dramatically in some states in 2012, and investigations were up, too, according to two recent reports. Scams involving foreclosed properties are particularly rampant.

Florida led the way by a large margin, with eight times the number of expected investigations, according to the LexisNexis Mortgage Fraud Index. Nevada came in second, with just more than 2.5 times the number of expected investigations. Those two states showed some of the worst declines during the collapse of the housing bubble.

The most common type of mortgage fraud involves false information on applications, according to the FBI. This category includes incorrect borrower names, lies about the borrower's job or income, misrepresentations about debts or assets, mismatched signatures, invalid Social Security numbers, and untruths about occupancy -- in other words, the borrower says the home will be a primary residence when it's really an investment property.

Top 10 states for mortgage fraud

State 2012 rank 2011 rank
Florida 1 1
Nevada 2 2
Arizona 3 3
Delaware 4 18
Illinois 5 8
New Jersey 6 10
California 7 7
Michigan 8 4
Georgia 9 6
New York 10 11

Source: Financial Crimes Enforcement Network.

Other common types of fraudulent activity include:

  • Lying on tax returns and financial statements.
  • Appraisal fraud.
  • False information about the borrower's bank deposits.
  • Faked verifications of employment.
  • Fraudulent escrow or closing documents.
  • Falsified credit documents.

Throwing homeowners an anvil instead of a life preserver

In addition, fraud targeting distressed property owners is on the rise. The Financial Crimes Enforcement Network reports a 58 percent rise in foreclosure-related fraud in 2012, where scammers offered some sort of "rescue" plan to distressed homeowners.

When the numbers of mortgage fraud originating solely in 2012 are examined, Ohio ranks No. 1 on the index, indicating a recent spike in activity in that state. New Jersey is second for highest number of mortgage fraud investigations originating in 2012.

See the top 10 states for reported mortgage fraud, according to the LexisNexis Mortgage Fraud Index, with their ranking in 2012 versus 2011 in the chart to the right.

Keep up with your wealth and mortgages and follow me on Twitter: @JudyMartel.

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9 Comments
Tim Vaughn
October 11, 2013 at 6:54 pm

Been working with a company named American National. They never have given me any proof of address. Im still leary about them.
Taken money to Wells Fargo Bank to pay for appraisals, paper work and never see a receipt. They always say we're going to close next week or the person talks so fast I don't understand what he's talking about. They want to sign new doc's, but never see anything. People say I'll call you back in 10-15 minutes and never do. After 2 days I'll get a call back and say we're so close to funding. The Mortgage company I owe have not heard or seen doc's from this company. How do I check them out?

re

Arnold
October 11, 2013 at 6:52 pm

Hey 2 years in a row, but we really have something to look forward to, and that is 2013 is not over yet, maybe we can let Nevada have it for a while or maybe Georgia, yeah, Georgia you can have it!

ed
October 11, 2013 at 3:55 pm

If they kept your money, why didn't you call the police? Something sounds fishy here...you aren't being honest with us 100% are you Julie?

Jeff
October 11, 2013 at 12:28 pm

As a Floridian, I can say we are No. 1!

Mortgage fraud in the Sunshine State has a long history and tradition, unfortunately.

Lona Alpert
October 11, 2013 at 10:33 am

Please advise of the value, worthiness and regulations of the State of Georgia Program called Georgia Dream - for a mortgage to purchase a home. Thank you.

pearlene & franklin mitchell
October 11, 2013 at 3:52 am

Hello , we being rob out of our house, we lost our home because of mortgage fraud if you can help us please... me and my husband.

Cari Beck
October 11, 2013 at 12:01 am

Before you start printing things you should do a little homework. There hasn't been a MORTGAGE in the state of Georgia in over 100 years. Ask any real estate Lawyer and they will agree.

Julie O’Brien
October 10, 2013 at 11:24 pm

My husband and I have been taken for a large sum of cash $40,000 by a person named Marc Cooper and daughter Danielle Cooper of "Keeping My Property"
After one year of emails and correspondence to help us modify our second loan, the bank PNC finally agreed to take a pay off due to our hardships. Marc Cooper wife Karen CEO/ Owner and daughter Danielle Cooper Modification Processor and Consultant at "Keeping My Property" "Kept My Money." Adding to our financial difficulties.
So if anyone else is in this same predicament please respond. I am sure that we are not alone.

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