Florida Ranked Highest in Mortgage Fraud

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In 2010 Florida once again led all states in the amount of reported mortgage fraud, but the Sunshine State is not alone. Mortgage fraud is also prevalent in New York, California, New Jersey and Maryland.

According to the Sun Sentinel, reports of suspicious activity relating to mortgage fraud in the U.S. rose last year to 70,472, nearly a five percent increase from 2009. Losses are estimated at more than $1.5 billion.

These reports show the most consistent problems last year to be misrepresentation on loan applications and issues relating to appraisals and home valuations.

Los Angeles-Riverside, California ranked highest with 17 percent of all reported fraud incidents last year. The Miami-Dade, Broward and Palm Beach county metro-area ranked fifth from these reports.

The problem Florida faces, is the large number of visitors, buyers and hopeful builders that are introduced to this laid back lending environment.

Jerry Tepps, a foreclosure defense attorney in Plantation explains how Florida and its warm weather tourist attractions may be the downfall of the Sunshine State.

“Florida is like Las Vegas: It attracts people from all over the place, and some of them are wrongdoers,” Tepps told the Sun Sentinel.

Lenders are learning how to identify problems and to protect themselves from fraud, but Latour “LT” Lafferty, a former prosecutor for the U.S. Attorney’s Office and head of the white-collar crime defense practice at Fowler White Boggs in Tampa, says there will always be new scams.

Scammers have a different strategy now that the housing market has tanked, focusing on fraud related to short sales and foreclosures, Lafferty said. “Now they’re preying on what the system offers them.”

Although there may be murky mortgage waters for Florida, mortgage loan applications rose four percent last week on a seasonal adjusted basis, and the refinance index increased six percent, as stated by Housing Wire.

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