Dallas-based Mortgagedaily.com reports mortgage fraud surged in 2008

by PegNews wire

Texans suffered $70 million in mortgage fraud in 2008.

DALLAS — Mortgage fraud reached a new high last year, according to the FraudBlogger Index published by mortgagedaily.com. Quarterly activity more than doubled from the prior period and was nearly 300 percent higher than a year earlier.

During 2008, more than $5 billion in mortgage fraud cases were tracked by http://www.fraudblogger.com/. Fraud rose from $4 billion the prior year and was the highest yet since MortgageDaily.com launched the FraudBlogger Index in 2006.

The index, which reflects a combination of the number of cases and the dollar volume, was 1488 last year, rising from 607 in 2007.

Year Dollar Amount Index

2008 $5,375,718,679 1488

2007 $4,004,127,260 607

The annual index is an average of the quarterly indices, while the dollar volume is the aggregate of all four quarters less cases tracked in more than one quarter.

Period Dollar Amount Index

Q4 2008 $2,682,060,476 2790

Q3 2008 $1,084,579,856 1220

Q4 2007 $708,365,613 600

"Mortgage fraud activity that might have otherwise gone undetected was uncovered as falling home prices and rising defaults pushed these crimes to the surface," said MortgageDaily.com Publisher Sam Garcia. "Although fraud is being uncovered at an increasing pace, the actual level of fraud on more recent originations has likely tumbled as production has dwindled and lenders have tightened guidelines."

California jumped to the top of the quarterly state rankings, with more than $1 billion in fraud tracked. Much of the increase was tied to around 11,000 mortgage fraud investigations reported by the U.S. Attorney in San Francisco.

A newcomer to the top-10 state ranking was New York -- where nearly $375 million in fraud cases were tracked. Texas came in relatively light, at just $70 million.

Source: Mortgagedaily.com