Signs Mortgage Fraud Might Be Picking Up
Mortgage fraud has increased by more than 20 percent since early 2009, according to a report from business information firm CoreLogic.

Lenders blame the increase on the increasing popularity of high-risk, high-volume loans underwritten by the government, especially FHA, as well as the prevalence of short sales and REO sales.

“Fraud continues to shift to areas of the lending business where large volume increases occur over short periods of time, or where advanced risk mitigation processes are not squarely in place," said Tim Grace, senior vice president of Fraud Solutions at CoreLogic.

CoreLogic reported:

· Increased lending through FHA and HARP (Home Affordable Refinance Program) loan programs accounted for most of the increased risk in 2009 and 2010.

· Second quarter of 2010 had the highest volume of single-family resident short sales with nearly 60,000 short-sale transactions.

· REO transaction volume is more than twice that of short sales with 120,000 REO sales in the second quarter of 2010.

· Investment companies are involved in a disproportionately higher percentage of suspicious resales.

· Flipping and flopping hot spots in the U.S. are Southern California, Phoenix, Detroit, and Atlanta.

Source: CoreLogic (11/17/2010)