Top 10 States For Mortgage Fraud

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]


Edit Your Comment

  1. Anonymous says:

    Number one in worst drivers, unemployment and now mortgage fraud! Legalized prostitution too. I love my home state.

  2. Jfielder says:

    Ah, good old Michigan. It is guaranteed to land on every top ten list of bad things going on in this country.

  3. nataku8_e30 says:

    Wow, Texas isn’t even on the list? That’s crazy!

  4. Jeff Newman says:

    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.

    • Garbanzo says:

      @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.

  5. HIV 2 Elway says:

    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%.

  6. Uncanny Valley PTA says:

    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.

  7. Anonymous says:

    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)

  8. nakedscience says:

    I’m surprised that Phoenix isn’t there!

  9. radiochief says:

    Why, oh why, is there never any good news about my home state. #1… Ugh!

  10. HurfDurf says:

    I am shocked that FL isn’t number one.

  11. RandaPanda says:

    @ 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.

  12. johnarlington says:

    But what about arizona. I suspect that this list only includes specific types of mortgage fraud.

  13. ooloncoluphid says:

    Do you even need a mortgage in Michigan? Aren’t homes going for about $1 there?

  14. HIV 2 Elway says:

    I like to say that I live in Missouri (Kansas City) but work in Missoura (Independence). Its fitting for many parts of the state.

  15. failurate says:

    @ ooloncoluphid:
    Spread that over 30 years, 1 cent will pre-pay your mortgage for 3 months.

  16. Pibbs says:

    Yeah Rhode Island! We’re number 1! Oh wait…

  17. j-o-h-n says:

    Where is NEVADA?

  18. Citizen Kang says:

    California, REPRESENT!!!

  19. nakedscience says:

    I meant Arizona, howie_in_az, but I’m self-centered and think Phoenix is the bestest spot.

  20. calquist says:

    Finally a top ten list that Missouri can make!!

  21. fourinxchange says:

    Rhode Island; unmatched in its flaws. That being said, I wouldn’t want to live anywhere else…

    …except maybe Portland OR

  22. sonneillon says:

    Colorado was number 1 for like 3 years leading up to the recession. Looks like we’ve “improved.”

  23. RandaPanda says:

    @ 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?

  24. varro says:

    Somewhere in Rhode Island, a football-headed baby is cursing that his brilliant schemes are being found out…

  25. ChuckECheese says:

    I went to grad school at Warshington University in St Louis, but now I live in Arizon-ee.

  26. MissPiss says:

    That was my first thought!

  27. frodolives35 says:

    At least Rhode Island is so small it probably was only about 6 fraud cases.

  28. u1itn0w2day says:

    Rhode Island ? Although the north east being a major source of seasonal home buyers in FLORIDA this might make sense .

    Rhode Island ?

  29. David Cjr says:

    crap, I live in IL. Why doesn’t this surprise me.

  30. swimman66 says:

    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.