Nevada took 2nd-place again in Interthinx’ quarterly mortgage fraud risk report.
From the report…
- Arizona surpassed California as the state with the highest fraud risk, possibly due to a migration from neighboring Nevada similar to that which occurred in 2004-2006. Nevada remains in second place with California, Florida and Michigan rounding out the top five states.
- The national Mortgage Fraud Risk Index increased by 4% from the previous quarter and 11% from the same quarter a year ago to 151 (n = 100). This is the first time since 2004 that this index has exceeded 150.
- On a state-by-state basis Arizona tops the list with a mortgage fraud risk index value of 246. Nevada remained in second place with an index value of 237, and California dropped down to the No. 3 spot with an index value of 216. Florida stayed in fourth place with an index value of 202, and Michigan was again ranked fifth with an index value of 178.
| rank | state | Mortgage Fraud Risk Index Q1 2010 |
| 1 | Arizona | 246 |
| 2 | Nevada | 237 |
| 3 | California | 216 |
| 4 | Florida | 202 |
| 5 | Michigan | 178 |
| US | 151 |
MikeZ
PROSECUTE!
There’s no need to put multitudes of people in jail, just give everyone involved in these crimes a felony fraud conviction to follow them to the grave.
That will be 1) disincentive for future abuse and 2) keep the ones who were caught from positions of authority in finance where they can reoffend.
DownButNotOut
Dang it MikeZ – Every once in awhile you come up with the perfect response. I agree!
Free Falling
Hmmmm…
I find it rather hard to believe that the fraud risk is perceived as higher today than during the peak of the NINJA liar lone period of 2005 – 2006 when some 35% of Nevada mortgages were subprime. Anyone in the lending industry can tell you that the underwriting standards have drastically increased in the past two years. Since lenders can no longer select their appraiser, it certainly reduces the risk of appraisal fraud which was obviously a key contributor in the bubble years.
I’m also not so sure about the geographical distribution. Are the fraudsters all in the former bubble market states or did the falling tide simply reveal the extent of the BS in the past and cause folks to focus more on these markets. Again, the major banks are putting these former bubble market states under much higher scrutiny than the fly over states. That would seem to reduce the likelihood of defrauding Nevada lenders and getting away with it.
If the banks are being snowballed on short sale valuations, maybe they need to wake up and do a little more due diligence before accepting the first offer presented by the seller. Just up the street from me was a short sale which the bank apparently accepted at well below lowest comparable sale in the ‘hood. Three days after closing the property resold for 20% more. (I’m not as good as most of you at reading the entrails of what is available from the County to confirm my suspicions.)
Is that fraud by the buyer/seller or bad decision making by the bank?
Carlo
Nice to see a report in which Nevada does not rank 49 out of 50.
DonC
Free Falling — I have the same questions as you do.
Let’s keep in mind that this report is designed to sell the services of the company putting the report together. In this sense it’s like a report on the incidence of termites from a company which derives its income from treating for termites — inherent in the system is a financial incentive to overstate the incidence.
In looking at the types of fraud the report tracks some types are far more serious than others. It does seem weird that there is still so much fraud when lenders aren’t exactly falling over themselves to write loans and the underwriting is very picky indeed.
inclinejj
Define fraud? Stated income=fraud.
How bout a credit card application? State the income? Fraud
Just read a report the other day that on stated loans most over stated income by over 50% fraud.
Lets lock all these people and put them all in jail.
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MOntage
“Lets lock all these people and put them all in jail.”
Sure. ALL the millions who lied on their mortgage application. And the loan officers who knew what was going on. And the realtors who also knew. And the appraisers.
At the same time, of course, reduce all this wasteful government spending and cut taxes.
Priceless.