A recent report from Interthinx shows that the risk of mortgage fraud has remained elevated in the wake of the housing bubble burst, as it continued to trend higher during the fourth quarter.
Mortgage records from the company's index indicated that the level of fraudulent activity increased by 8 percent during the three-month period form the previous quarter. However, in the first three quarters of 2011, the index had remained relatively flat.
"Valuation fraud continues to be a problem for lenders intent on mitigating overall fraud risk," said Interthinx chief evaluation officer Mark Chapin. "Lenders must take great care with their collateral valuation process in this environment, as many areas around the country are still experiencing home value declines."
Meanwhile, the overall Mortgage Fraud Risk Index was also up 1.4 percent during the fourth quarter from the previous three-month period, while also rising 3.6 percent from a year earlier. The report noted that this was the seventh consecutive quarter that the index was at a level between 140 and 145, indicating an elevated risk of fraudulent mortgage activity.