Home / News / Market Studies / Report: Mortgage Fraud Jumps by 45 Percent
Print This Post Print This Post

Report: Mortgage Fraud Jumps by 45 Percent

Reported incidents of mortgage fraud in the United States increased by an annual rate of 45 percent during the second quarter of 2008 - on fewer loan applications - according to a new report released today by the ""Mortgage Asset Research Institute"":http://www.marisolutions.com (MARI).
Key findings from the MARI Quarterly Fraud Report revealed that fraud most often occurs at the beginning of the loan process. More than 65 percent of fraud incidents are attributed to ""General Application Misrepresentation"" - a trend that has continued over the past two quarters, the institute said. ""General Application Misrepresentation,"" MARI said, is when information such as an incorrect name, occupancy, or asset is potentially falsified during the application process. This fraud trend is followed closely by reported misrepresentations related to income (36 percent) and employment (20 percent), MARI said.
%{=FONT-STYLE: italic}Within its Quarterly Fraud Report, MARI revealed three observations to help combat fraud:%
- Mortgage organizations need better technology tools to evaluate applications;
- More collaboration is needed between mortgage organizations; and
- Mortgage organizations need to stop suspicious loan applications early on before they go into the origination stage - the stage where most of the fraud occurs.
In addition to aggregate fraud, MARI's quarterly report tracks fraud at the state level, and for two consecutive quarters, Florida leads all states in reported mortgage fraud, followed by California and Illinois, respectively, the institute said.
The continued increase in fraudulent submissions ""is further validation that the industry's fight against mortgage fraud must remain constant and diligent,"" MARI said in its report.
The MARI Quarterly Fraud Report is based on data submitted by MARI subscribers (representing over 80 percent of the wholesale mortgages originated in the United States) on loans originated in the second quarter of this year that have since been classified as fraudulent. To access the institute's full report for Q2, ""click here"":http://www.marisolutions.com/resources-news.asp.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
x

Check Also

What’s Missing from GSE Reform

Fannie Mae and Freddie Mac are preparing to exit conservatorship. However, a new paper from the Urban Institute states that the Treasury’s plan is “based on a misconception.”

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.