Mortgage fraud activity flat, still a serious issue

After the housing market collapse, the mortgage industry became a hotbed for fraud and other illegal activity, but some states continue to post much higher numbers than others.

After the housing market collapse, the mortgage industry became a hotbed for fraud and other illegal activity, but some states continue to post much higher numbers than others.

Government initiatives to crack down on mortgage fraud have proven to be somewhat successful on a national platform during the first quarter, according to the latest Mortgage Fraud Index from MortgageDaily.com.

At the beginning of 2012, there were 1,151 reported cases of illegal activity pertaining to home loans. This was relatively unchanged from the previous quarter and still accounted for an estimated $1.8 billion in damages.   

"Activity has been fairly consistent as smaller mortgage bankers hit with repurchases continue to uncover fraud committed during the housing boom years," said Mortgage Daily Founder and Publisher Sam Garcia.

Specifically, Florida led the nation with 163 major incidents of mortgage fraud during the first three months of the year, the report said. This amounted to an estimated $260 million in damages. Meanwhile, California had slightly fewer cases with 160 incidents, totaling $226 million. In contrast, efforts to stop illegal activity in North Carolina resulted in the state dropping from a top-five position for the first time since 2006.



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