California Real Estate Fraud Report

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Interthinx® rates California as top mortgage fraud hotspot

Agoura Hills-based Interthinx® has just published its 4th quarter 2009 report on the risk of mortgage fraud. For those who live in California, the bad news is that the Golden State has been rated as the highest state for the risk of mortgage fraud, followed by Nevada (a previous 5 quarter winner, just nosed-out by California in the latest survey), Arizona, Florida and Colorado. All are at the top of the list for defaults and foreclosures.

Risk of mortgage fraud consists of several metrics. As reported in CNNMoney, the occupancy risk index rose 16 percent since the 3rd quarter measurement. Occupancy fraud is the term for when a borrower states on his or her loan application that s/he will be occupying the home. Owner-occupied homes are known by lenders to be less likely to go into default and therefore receive more favorable interest rate quotations. Non-cash buyers who “flip” properties often commit loan fraud / mortgage fraud on their loan applications in order to receive the lower interest rates. But – and here’s the catch – many lenders are now performing random drive-bys of properties for which the applicant owns more than one home in order to determine whether the applicant lied, in which case the legal and financial repercussions for defrauding the lender could be severe.

Another risk factor that is up sharply is property valuation fraud. Although appraisers are now bound by the Home Valuation Code of Conduct, aka HVCC, Interthinx® found evidence of schemes with both short sale and REO properties in which the the property valuation has been compromised.

Interthinx®, a subsidiary of Verisk Analytics, provides risk mitigation (risk reduction) and regulatory compliance tools for the financial services industries.

Read the full article on CNNMoney. The Interthinx® report can be found at The Mortgage Fraud Risk Report.

© Copyright 2007-2018 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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