Instances of ‘fraud for property’ – i.e., mortgage fraud to attain homeownership – are increasing, according to Interthinx's quarterly Mortgage Fraud Risk Report for the third quarter. The company's analysts point to greater than 20% increases in the past year in both the Employment/Income and Identity Fraud risk indices.
A closer examination of fraud for property cases shows that there is usually a network of professional enablers involved in these transactions who encourage borrowers to lie about their qualifications or who lie on their behalf, Interthinx says.
"In the past, lenders viewed fraud for property as a more benign type of crime than fraud for profit, but when those loans defaulted, everyone learned how dangerous this type of fraud truly is," says Kevin Coop, president of Interthinx. "The crimes almost always include an inside party who is reaping a profit on the fraud."
Nevada remains the state with the highest fraud risk, according to the company, with a Mortgage Fraud Risk Index of 254. Its largest population center, Las Vegas, takes over as the most risky metropolitan statistical area, with an index of 273. Arizona is the second-riskiest state, with an index of 214, and California is in third place, with an index of 190.