Mortgage fraud has jumped 20 percent in the past year, largely fueled by increased lending through federal refinancing programs, according to national research firm CoreLogic, which provides market information and risk analysis to the mortgage and real estate industries.
In its most recent update to the 2010 Mortgage Fraud Trends report, Santa Ana, California-based CoreLogic noted that fraud risk is following areas of high activity. Currently, the Federal Housing Administration and the Home Affordable Refinance Program (HARP) are heavily involved in refinancing activity. The current report analyzed trends through the second quarter of 2010.
This follows earlier reports indicating a significant rise in identity fraud used to carry out mortgage scams. Criminals are continuing to find ways to scam lenders, and many of the crooks are the same people who helped spark the subprime meltdown.
As lenders deal with large numbers of homes in delinquency and foreclosure, CoreLogic predicts that the risk of fraud will grow throughout 2011 because savvy criminals will find ways to manipulate the methods used to dispose of those properties.
| Mortgage Refinances Fertile Ground For Fraud |
In the past 18 months: | – | The risk of fraud in refinanced loans has spiked 32 percent | | – | The risk of fraud in loans made to purchase homes has remained level | Source: CoreLogic |