Florida leads the nation in mortgage application fraud, according the Annual Mortgage Fraud Report released Monday by LexisNexis. This the fifth consecutive year that Florida has led in loans investigated for fraud.
Nationwide, mortgage application fraud also is on the rise, with nearly three-fourths of all loan activity marred by some type of misrepresentation.
Florida’s LexisNexis® Mortgage Fraud Index (MFI) ranked first in the nation for loans investigated in 2013. The MFI is an indication of the amount of mortgage-related fraud and misrepresentation found through the service’s fraud investigations in various geographical areas within any particular year.
Florida’s reported MFI of 529 is more than five times the expected rate of fraud for the state, based on its origination volume.
In its executive summary, LexusNexus wrote, “It is clear that the financial environment resulting from the 2008 housing market crises remains a breeding ground for origination fraud. The reduced volume of consumers who are able to qualify for mortgage loans has led to a fiercely competitive and, in some ways, familiar Fraud for Profit marketplace in which fraudsters resort to dishonest practices in order to fabricate creditworthiness and close deals. “
The company believes that fraud and misrepresentation in the mortgage application process is likely to remain a serious and ongoing national problem.