Reported Incidents of Mortgage Fraud Decrease According
To LexisNexis® Mortgage Asset Research Institute
Florida, New York and California Top List of States with Highest Reported Mortgage Fraud and Misrepresentation Rates
New York, NY – Reported incidents of subscriber-verified mortgage fraud and misrepresentation by professionals in the mortgage industry in the U.S. have decreased from 2009 to 2010, according to a new report released today by the LexisNexis® Mortgage Asset Research Institute. Florida, ranked number one in 2009, is once again first place in the country for reported mortgage fraud and misrepresentation based on the Mortgage Asset Research Institute Fraud Index. Florida also has just over three times the expected amount of reported mortgage fraud and misrepresentation for its origination volume. New York remained in second place, followed by California in third.
The 13th Periodic Mortgage Fraud Case Report examines the current state of subscriber-verified residential mortgage fraud and misrepresentation in the U.S. committed by industry professionals, based on data submitted by LexisNexis Mortgage Asset Research Institute subscribers. The full report, as well as previous years’ reports, is available on the Web site at: http://www.lexisnexis.com/risk/fraudreport.
Reports of fraud and material misrepresentation submitted to the LexisNexis Mortgage Asset Research Institute decreased 41% from 2009 to 2010, the first time in several years there was a decrease. This decrease does not necessarily correlate to actual occurrences of mortgage fraud, which are still rising according to several industry sources, including Mortgage Fraud Suspicious Activity Reports (SARs) submissions. The decline brings the number of cases reported to the LexisNexis Mortgage Asset Research Institute in 2010 to the same level (by less than half a percentage point) as the number of reported cases in 2006. The decrease in reports is believed to be attributed to several factors, including a decrease in loan origination volumes, fewer resources available to investigate and report incidents and new and stronger Financial Crimes Enforcement Network (FinCEN) requirements that encourage professionals to report on suspected fraud.
“The data suggests that in 2010 there was a decrease in the number of verified incidents of fraud reported to the LexisNexis Mortgage Asset Research Institute. While this is a noticeable decrease, we believe it can be attributed to a variety of factors, including the post-economic crisis mortgage fraud landscape,” said Jennifer Butts, LexisNexis Mortgage Asset Research Institute manager of Data Processing and co-author of the report. “We are seeing the convergence of several factors, including decreasing loan origination volumes and fewer resources available to investigate and report incidents of fraud as discovered.”
“Mortgage fraud has become more complex and harder to verify using traditional methods,” said Denise James, LexisNexis Risk Solutions director of Real Estate Solutions and co-author of the report. “Mortgage businesses are quickly trying to implement new procedures to detect emerging frauds while, at the same time, focusing their energies on recovering the huge financial losses of recent years,” said James.
The LexisNexis® Mortgage Asset Research Institute provides valuable industry insight derived from its Mortgage Industry Data Exchange (MIDEX®) database, which contains an aggregation of reported incidents of fraud and verified misrepresentation submitted by leading mortgage industry participants. The LexisNexis Mortgage Asset Research Institute analyzes this industry data and presents reports that depict a national composition of residential mortgage fraud and misrepresentation perpetrated by industry professionals to support the industry's effort in the fight against mortgage fraud. Unlike SARs, where the fraud and misrepresentation information is not shared with the industry, MIDEX information is available to all contributors to the database as a way to help the industry protect itself from perpetrators or suspicious participants.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions (www.lexisnexis.com/risk/) is the leader in providing essential information that helps companies across all industries and government predict, assess, and manage risk. Building on the legacy of proven LexisNexis services from the past 35 years, and combining cutting-edge technology, unique data and advanced scoring analytics, Risk Solutions provides products and services that address evolving client needs in the risk sector while upholding the highest standards of security and privacy. The LexisNexis Mortgage Asset Research Institute is part of LexisNexis Risk Solutions. LexisNexis Risk Solutions is headquartered in Alpharetta, Georgia, United States.
About LexisNexis Mortgage Asset Research Institute
The Mortgage Asset Research Institute is a premier provider of mortgage fraud prevention solutions and information services to the mortgage and financial services industries. The 600 plus subscribers represent the entities involved in the wholesale mortgages originated in the United States. The Mortgage Industry Data Exchange (MIDEX®) service assists lenders in identifying mortgage and real estate professionals that have been associated with fraudulent activity or serious misrepresentation. For more information about services to combat mortgage fraud, go to
LexisNexis Risk Solutions