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Mortgage Fraud Down, But Tied to Foreclosure

According to a report on %{=FONT-STYLE: italic}PR Newswire% earlier this week, mortgage fraud activity dropped during the third quarter. This conclusion was based on data from the FraudBlogger Index published by %{=FONT-STYLE: italic}MortgageDaily.com%.
Last quarter, $1.1 billion in active criminal and civil mortgage fraud cases were tracked. That figure is down from $1.7 billion in the second quarter and $1.2 billion during the third quarter of 2007, %{=FONT-STYLE: italic}PR Newswire% reported. To put things into perspective, it should be noted that Q2 numbers reflect increased activity by federal investigators to crack down on mortgage-related fraud.
Some of the states with the highest amounts of fraud activity are also the states with the largest foreclosure numbers. As ""%{=FONT-STYLE: italic}DSNews.com% reported"":http://dsnews.comview_story.cfmxid=3049 earlier this month, Charles Knight, an attorney for the New York Department of Consumer Affairs, has noted that 20 percent of foreclosures include some element of fraud.
The states with the largest dollar amounts tied to mortgage fraud cases - Florida ($293 million), California ($159 million), and Nevada ($120 million) - also posted the highest foreclosure filings during September, based on RealtyTrac's most recent market data. Arizona showed a similar correlation. The state with the biggest increase was Florida, which saw active mortgage fraud cases surge $86 million from the second to the third quarter.