WASHINGTON – The Mortgage Asset Research Institution (MARI) has released its eighth annual mortgage fraud report for the Mortgage Bankers Association, and the findings show that while mortgage originations remained strong in 2005, so did mortgage fraud.
According to the Financial Crimes Enforcement Network, the number of mortgage-related Suspicious Activity Reports in 2005, were 33% higher than in the first six months of 2004. What's more, total cases reported in 2004, were 50% higher than in 2003.
Among the highlights of the latest report:
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* Florida had the most reported mortgage fraud against lender cases for 2005, followed by Utah, Georgia, Colorado and Illinois.
* Georgia, which had led the nation in total reported mortgage fraud against lender cases from 2002-2004, has dropped to the third position for mortgage fraud.
* Colorado and Illinois show steadily increasing problems over the past five years. Colorado was number 21 in 2001, and now ranks fourth in highest number of reported fraud cases. Illinois rose from 11th in 2001, to fifth in 2005.
* South Carolina shows the greatest improvement in its MARI Fraud Index, moving from the state with the highest number of cases in 2001, to number 19 in 2005.
Another interesting finding of the report shows that lenders are under increased competitive pressure to adopt new products, some of which have significantly greater opportunity for fraud.
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