Tuesday, May 10, 2011

Virginia Ranked No. 7 For Mortgage Fraud Cases

Report: Va. at No. 7 for mortgage fraud cases

Virginia was a hotbed of mortgage fraud activity last year even as cases of fraud fell across the country, according to a report released Monday.
The state ranked seventh in a list showing where mortgage fraud was most prevalent, according to LexisNexis Mortgage Asset Research Institute, which tracks reported cases of mortgage fraud across the country.
That's a big jump from 2009, when Virginia was not among the top 20, according to the report.
The institute maintains a database of mortgage fraud cases that is compiled using data submitted from mortgage companies across the country. It runs the data through a formula to create an index measuring how widespread fraud is in each state based on the total number of mortgage originations each year.
Virginia's score of 113 on the fraud index placed it behind Michigan but ahead of Ohio. Florida topped the list with a score of 302, followed by New York (279) and California (233).
The report's authors, Denise James and Jennifer Butts, attributed the increase in mortgage fraud in some states to newer schemes that have arisen because of the housing slump.
"Fraud is and will always be a crime of opportunity, especially in times of desperation," James and Butts wrote. "Fraudsters thrive on inadequacies within lengthy processes and a lack of consistency across organizations and/or industries that help them hide their true motives."
Among the newer schemes highlighted in the report is a practice the industry calls "flopping," in which a real estate agent or broker persuades a bank to sell a distressed home for less than its market value. The agent or broker simultaneously finds a buyer willing to pay market value for the property and pockets the difference.

No comments:

Post a Comment