As you might imagine, mortgage fraud is up, up, up. 26%!
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
6. New York
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.