Reported incidents of mortgage fraud and misrepresentation by professionals in the mortgage industry continue to climb, increasing by 7 percent from 2008 to 2009, according to a new report from the Mortgage Asset Research Institute.
While the pace has slowed since the 2007-2008 increase of 26 percent, the continued increase is believed to be attributed to better industry reporting and policing.
MARI's fraud index, or *MFI, is based on the number of fraud and misrepresentation incidents reported for each state and is not based on mortgage dollar amounts.
The MFI is calculated by dividing a state's actual percentage of national mortgage fraud reports by that state's expected fraud (based on total loan originations). For example, a state with 5 percent of the nation's loan originations would be expected to have 5 percent of reported fraud incidents. If that state had 10 percent of reported fraud incidents, however, that state would have an MFI of 200, or twice its expected mortgage fraud rate.
Click ahead to see MARI's top 10 states for mortgage fraud in 2009.
By Constance Parten
Posted April 26, 2010
Complete report and methodology