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Mortgage Fraud Risk Spreading Across the Country

nationalmortgagenews.com | May 6, 2015

By Jacob Passy

The risk of mortgage lenders being victimized by fraud increased during the first quarter as economic conditions nationwide shift, according to a report from Interthinx.

The report found that overall the National Mortgage Fraud Risk Index rose 3% in the fourth quarter of 2014 from the previous quarter and remained unchanged year-over-year at 101. Additionally, Interthinx's research found that purchase transactions carry more risk than refinances, due to higher occupancy and property valuation risk.

In terms of national trends, while states with large numbers of distressed properties such as California and Florida continued to see higher mortgage fraud risk, the situation has worsened elsewhere around the U.S. as well. The Northeast continues to see high risk, with the levels worsening in parts of New York.

Furthermore, states with burgeoning energy industries, including Texas, Oklahoma, Kansas, North Dakota and South Dakota, are displaying greater economic volatility. This in turn has led to rising mortgage fraud risks in parts of those states.

"Clearly, mortgage fraud is a crime of economic opportunism, the nature of which serves to remind our industry that state, MSA and ZIP-code trends can be more directly linked to cause and effect than the national trends," said Jeff Moyer, president of Interthinx, in the May 5 news release announcing the report's results.

Despite the changing geography of mortgage fraud risk, Florida was still the riskiest state with an index of 130 because of property valuation and occupancy concerns.

Overall, the Property Valuation Fraud Risk Index fell 2% from the previous quarter but rose 19% the same period in 2013, to 120. The Occupancy Fraud Risk Index was down across the board, by 2% from the third quarter and 6% year-over-year, at 131.

Employment and income fraud increased 3% quarter-to-quarter but nonetheless improved 20% from a year ago, with an index of 61. The Identity Fraud Risk Index also rose from the previous quarter by 15%.

Interthinx, a subsidiary of First American Financial Corp., provides services to aid mortgage lenders in evading risk.


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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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