According to the Financial Crimes Enforcement Network (FinCEN), approximately 69,000 Suspicious Activity Reports (SARs) specific to Mortgage Loan Fraud (MLF) in 2012 were received—a 25 percent decrease from those received in 2011.
As summarized by the 15th-Annual-Mortgage-Fraud-Report-LexisNexis, five states—Florida, Arizona, New Jersey, California, and New York— occupy space on both the Investigation and Origination Mortgage Fraud Indices (MFIs).
Florida’s 2012 Investigation MFI, 805, indicates that the state had over eight times the expected rate of reported fraud and/or misrepresentation based on its origination volume. However, for loans originated in 2012, its Origination MFI is 169.
Ohio, ranked first on the Origination MFI list, has a five-year high MFI of 224—which indicates that it had over two times the expected rate of reported fraud and/or misrepresentation for 2012 based on its origination volume.
Slightly over four percent of reports submitted by MIDEX subscribers for loans originated in 2012 included some type of Loan Modification fraud and/or misrepresentation. This is down from seven percent of loans originated in 2011.
Eight states—Vermont, Alabama, New York, Kentucky, Pennsylvania, Iowa, Louisiana, and Delaware—rank highly on both Collusion Indicator Indices (CIIs) as areas with high percentages of potential non-arm’s length transaction activity.
Vermont’s CII for properties transferred with a 20 – 95 percent loss, 492, and CII for properties transferred with a 50 – 95 percent loss, 437, are the only CIIs over 400. In each of these scenarios, the state’s potential collusion is four times what would be expected, given the number of recorded deed transfers for Vermont.
All states in the top ten ranking of default properties have decreased percentages of total properties in recorded default in 2012 than in previous years.
The only state to appear in the top ten on all three indicator lists (MFIs, CIIs, and volume of properties in default) is New Jersey.
Five states appear on both the MFI and property default top ten rankings:
Florida, Nevada, Illinois, Georgia, and Ohio. New York and Delaware are represented on the MFI and CII.