Mortgage Fraud Risk Index Drops to Lowest Level Since 2009

""Interthinx"":http://www.interthinx.com/ released its quarterly Mortgage Fraud Risk Report Wednesday, showing that the national Mortgage Fraud Risk Index has dropped below the 140 mark for the first time since 2009.

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The report, put together by an internal team of fraud experts at Interthinx, showed that the National Mortgage Fraud Risk Index decreased to 139, 4.3 percent down from last quarter, 3.1 percent from the first quarter of 2011, and lower than it's been since the second quarter of 2009.

The number of ""very high risk"" metropolitan statistical areas (MSAs) also fell along with the national risk index, dropping from 67 to 62. Florida and California together house more than half of the nation's ""very high risk"" metros, with Florida being home to half of the top ten riskiest ZIP codes in the United States. Florida was also named third riskiest state, though California actually saw its own risk index decline from 192 last quarter to 173 this quarter and experienced declines in type-specific risk across nearly all categories.

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Nevada took back its first-place spot as ""Riskiest State"" after coming in second to Arizona in the last quarter of 2011. Nevada has the dubious honor of dominating this category consistently, falling out of first only three times since Interthinx started releasing its quarterly report in Q2 2009.

The New York tri-state area saw continued increases in risk this quarter. New Jersey moved up to its highest rank so far on the list of riskiest states, coming up to fourth place. New York also moved up, cracking the top ten riskiest states for the first time. The two riskiest ZIP codes in the country-representing Clifton, New Jersey and Jamaica, New York-were from the tri-state area, as well.

While some states and the nation as a whole experienced decreases in risk indices, the report showed an increase in employment and income fraud risk of 5 percent from Q4 2011 and 18 percent from last year. Interthinx analysts said they think the increase is due to misrepresentation of borrower data to meet thresholds required by lenders.

Also of note was a surge in refinancing activity as mortgage rates continued to fall. This surge has led to changes in loan applications that have caused many of the trends seen over the last year, the report speculated.

Based on the results of the report, Interthinx warned that areas that have been consistently risky-like Arizona, Nevada, and Florida-will likely continue to see high foreclosure rates in the near future. The company warned that these high-risk areas ""bear close scrutiny going forward.""

The full report can be found ""at this link"":http://www.interthinx.com/pdf/12_Q1MFRR_052112_FNL.pdf.