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Ohio's Top Ranking in Mortgage Fraud Raises Questions

columbusceo.com | September 13, 2013

By Mark Williams

When it comes to mortgage fraud, Ohio is No. 1.

The 15th annual mortgage-fraud report released by LexisNexis yesterday shows the state had more than twice the rate of reported fraud or misrepresentation than it should have had in 2012. The report is based on loans sought by people buying homes or refinancing their homes last year.

Ohio has been working its way higher on the list since 2008, when it was 30th. Last year, it was 14th. In the most recent report, New Jersey was second and California placed third.

How Ohio managed to make its way to the top of the list isn’t clear.

The report doesn’t say why, and LexisNexis doesn’t provide the total number of cases of reported fraud or misrepresentation in the state.

“I can’t speculate as to why that is,” said Tim Coyle, LexisNexis’ senior director of financial resources.

The report is compiled using data reported by mortgage lenders, agencies and insurers. It found that 70 percent of fraud comes from misrepresentations on mortgage applications. The report found a smaller percentage of fraud related to tax returns and financial statements and appraisals.

In general, the amount of fraud has gone down, the report noted. The report cites data from financial institutions that show the amount of suspicious activity was off 25 percent in 2012.

The Ohio Bankers League said it was puzzled by Ohio’s ranking.

“We are not familiar with the Lexis report’s methodology, so it’s difficult to explain the underlying trend of Ohio moving to the top of their index,” the league said in an email.

The league said a separate report from the Financial Crimes Enforcement Network found Ohio was 24th in per capita mortgage-loan fraud last year.

Michael Walker, vice president of Concord Mortgage and president of the Columbus Mortgage Bankers Association, also had doubts.

He said cases of fraud have fallen dramatically, with lenders putting in tough processes to verify homebuyers’ claims when it comes to income and job status.

Walker said most of the fraud in Ohio occurred several years ago, before the financial crisis.

“I find it amazing to think that currently in new originations there is that type of fraud going on,” he said.

The report also said that Ohio had the fifth-highest percentage of loans in default in 2012, at 3.41 percent. Ohio was ninth in 2011 at 3.64 percent.

 

Back to September 2013 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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