As you might imagine, mortgage fraud is up, up, up. 26%!
USAToday says:
The increase came as lenders dramatically tightened their standards, making it more difficult for borrowers to qualify for home loans without large down payments, solid credit and proof of their incomes. With credit far tighter, about $1.4 trillion in home loans were made last year, down about a third from a year earlier, according to trade publication Inside Mortgage Finance.
The recession has also increased pressure on shady mortgage lenders and brokers – as well as borrowers – to lie on loan applications, according to the fraud report. “There’s a lot more desperation, with the economy being what it is,” said Jennifer Butts, one of its co-authors.
Top 10 States For Mortgage Fraud
10. Colorado
9. Missouri
8. California
7. Michigan
6. New York
5. Maryland
4. Georgia
3. Illinois
2. Florida
1. Rhode Island
The Mortgage Asset Research Institute, which produces the report, says the Rhode Island is a shocking #1 — as they had never even appeared in the top 10 in previous years.
For the first time, Rhode Island is ranked first in the country for mortgage fraud. Future reports will tell if this is a statistical anomaly; however, current data suggests that the state has emerged with a problematic and heretofore unnoticed mortgage fraud problem.
Congratulations to the Ocean State.
Reports of mortgage fraud jump 26% in past year [USAToday]
Mortgage Fraud Report (PDF) [MARI]
(Photo:Birdfreak.com)
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Number one in worst drivers, unemployment and now mortgage fraud! Legalized prostitution too. I love my home state.
@ShreyashiSterope:
Me too. Well, not so much at the moment. It’s pretty scary in this little corner of New England.
Ah, good old Michigan. It is guaranteed to land on every top ten list of bad things going on in this country.
@jfielder23: If by Michigan you mean Rhode Island.
Wow, Texas isn’t even on the list? That’s crazy!
@nataku83: I know, I was surprised too.
@nataku83: Really surprised!
I work as a loan fraud analyst, and what I see doesn’t really reflect this list.
The top 5 that we look at would be California, Florida, Nevada, Michigan, and Illinois.
@Jeff Newman: It appears that the report ranking Rhode Island first is based on rates, not total number of cases. If Rhode Island had twice as many fraud cases per thousand mortgage application as California, but California had 30 times as many mortgage applications, you’d still see 15 fraud cases in California for every 1 fraud case in Rhode Island.
I’m surprised to see Missoura on there. UMB is such a major player regioanlly and they won’t lend to anyone. They have a loan to deposit ration somewhere around 50%.
@HIV 2 Elway Resurrected: Ratio, not ration. You get it.
If Rhode Island is a surprising #1, that probably means that some Mob-related mortgage scheme is being flagged as fraud. Probably after years of passing under the radar.
At least USA Today got it right by including “Reports of” (unlike this otherwise fine venue).
There are at least a couple possible explanations for increased reports of mortgage fraud:
1. People are desperate because of the economy and lying more.
2. Lenders have realized that housing prices aren’t going up forever, and that they might lose money on a foreclosure and therefore unlike several years ago the lenders actually care about detecting mortgage fraud.
I know which explanation I tend to favor (hint: “Liar Loans” used to be common enough that they had a name)
I’m surprised that Phoenix isn’t there!
@nakedscience: Phoenix isn’t a state.
Why, oh why, is there never any good news about my home state. #1… Ugh!
@radiochief: @MrPibbistheGreatestSodaEver:
I liked it better when we never did anything worth headlines….
I am shocked that FL isn’t number one.
@ HIV 2 Elway Resurrected: Okay, you really did not just say “Missoura.”
For freakin’ crying out loud!!! This state name is Missouri!! “i” like ee! Not “ah”. Grrrr…
Just a pet peeve of mine, being from Missouri and all.
@RandaPanda0283: It bugs me, too…. Well, that and pronoucing “Wash” as “Warsh”. (St. Louis expat, here)
@Randa the Panda: Grating nails on the blackboard for many the past 8 years was nuclear as “NEW-KEW-LER” by the genius who had access to the button.
I guess a Yale education isn’t as impressive as one might be led to believe, or their standards are pretty low.
@PGibbons: It’s all in who you know, for some people.
@PGibbons: Basically, trust nobody in government who went to any Ivy League school.
But what about arizona. I suspect that this list only includes specific types of mortgage fraud.
Do you even need a mortgage in Michigan? Aren’t homes going for about $1 there?
@RandaPanda0283:
I like to say that I live in Missouri (Kansas City) but work in Missoura (Independence). Its fitting for many parts of the state.
@ ooloncoluphid:
Spread that over 30 years, 1 cent will pre-pay your mortgage for 3 months.
Yeah Rhode Island! We’re number 1! Oh wait…
Where is NEVADA?
California, REPRESENT!!!
I meant Arizona, howie_in_az, but I’m self-centered and think Phoenix is the bestest spot.
Finally a top ten list that Missouri can make!!
Rhode Island; unmatched in its flaws. That being said, I wouldn’t want to live anywhere else…
…except maybe Portland OR
Colorado was number 1 for like 3 years leading up to the recession. Looks like we’ve “improved.”
@sonneillon: Or, less people bother risking arrest to live there.
@ HIV 2 Elway Resurrected: Well, I live in Joplin and for the most part, people around here say it “Missouree” not “Missourah”. I think a lot of it depends on how you speak, and where you grew up.
For example, many people I know will say things like “gunna” and tend to drop the ‘g’s’ off of words like working, making it workin’. Another pet peeve of mine, but *sigh*. What can ya do?
Somewhere in Rhode Island, a football-headed baby is cursing that his brilliant schemes are being found out…
I went to grad school at Warshington University in St Louis, but now I live in Arizon-ee.
That was my first thought!
At least Rhode Island is so small it probably was only about 6 fraud cases.
Rhode Island ? Although the north east being a major source of seasonal home buyers in FLORIDA this might make sense .
Rhode Island ?
crap, I live in IL. Why doesn’t this surprise me.
RI is such a pit. High taxes, corruption, cold weather, etc. Once the market turns around I’m getting my family out and never looking back.