Florida Registers Highest Rate Of Mortgage Fraud Incidents

December 3, 2008 8:39 a.m. EST

Reston, VA (AHN) - Mortgage fraud incidents continue to rise in the U.S. According to the Mortgage Asset Research Institute during the second quarter mortgage fraud incidents went up to 45 percent from 42 percent in the first quarter.

Most incidents involved borrowers not reflecting their true financial picture to get around more stringent lending standards. By state, borrowers from Florida topped committing mortgage fraud, followed by California and Illinois.

Jennifer Butts, director of operations of MARI, said most common acts of fraud involving mortgage documents were using fake bank statements printed from personal computers and applying correction fluid on pay stubs to reflect a different figure or date.

Because of the rising incidents, mortgage fraud had cost lenders $1 billion over the past 10 years, the Mortgage Bankers Association said.

To address the problem, MARI recommended that lenders acquire better tools to detect inconsistencies in documents submitted, an improvement in data sharing and the early identification of suspicious applications at the start of the borrowing process.