Mortgage fraud on the rise.

As the number of home sales dwindles and banks tighten underwriting requirements for mortgages, fraud is rising.

Cases of reported mortgage fraud went up 26% from 2007 to 2008, according to the Mortgage Asset Research Institute (MARI). The economic downturn may have created more desperation, causing more people to try committing mortgage fraud. Also lenders are looking more closely at the documents the borrowers are producing there by catching more fraud.

The top states for mortgage fraud are Rhode Island, Florida, Illinois, Georgia, Maryland, New York, Michigan, California, Missouri and Colorado

The most prevalent form of mortgage dishonesty in 2008 was application fraud. The second most prevalent type of fraud was due to misleading tax returns and financial statements. Followed by appraisal fraud.

With mortgage fraud on the rise lenders are taking longer to look over a file in underwriting. This is a factor in the longer turn times many lenders are facing.

Wally Sears

Sr Loan Officer

(904) 610-9771

wsears@aebmortgage.com