For two years in a row, the number of residential mortgage fraud cases have fallen, according to the LexisNexis Risk Solutions Mortgage Fraud Report. In fact, in its latest report, from 2010 to 2011, mortgage fraud cases dropped 35 percent.
Reseachers tracked the number of cases reported by financial institutions of mortgage fraud and misrepresentation by mortgage industry professionals. They say the decrease could be partially attributed to a drop in mortgage originations and sales of new and existing homes reflected in that time period. Also, they note that fewer mortgage fraud schemes seem to be occurring when buyers try to get a loan, such as with a buyer falsifying information on their loan application.
The mortgage fraud cases that seem to be more prevalent nowadays tend to center around the buying and selling of a foreclosure, the FBI reports. Also, cases where buyers and sellers collude in a home sale or purchase transaction are on the rise.
Mortgage fraud is far from a problem that is going away for the industry. While the number of cases decreased, reports of suspected mortgage fraud activity soared 31 percent last year, according to the Financial Crimes Enforcement Network. But researchers add that number may reflect an increase in recent investigations over loans made during the housing boom.
The states with the highest reported cases of mortgage fraud are Florida, Nevada, Arizona, Michigan, and Rhode Island, according to the LexisNexis study.