Eighth Periodic Mortgage Fraud Case Report to Mortgage Bankers Association
Link to Report in PDF Format
The Mortgage Bankers Association (MBA) announced that the Mortgage Asset Research
Institute, Inc. (MARI®) has delivered its eighth annual fraud report to MBA. The report, Eighth Periodic Mortgage Fraud Case Report to Mortgage Bankers Association, examines the current composition of residential mortgage fraud and misrepresentation in the United States based on reports by participating lenders to MARI.
Over the past few years, MBA has been a leader in raising the national profile of mortgage fraud against lenders by hosting a National Fraud Summit in 2005, launching a Mortgage Fraud Against Lenders Resource Center Website (http://MBAFightsFraud.MortgageBankers.org), improving communications between law enforcement and mortgage lenders, advocating additional resources for law enforcement, and hosting today’s first annual National Fraud Issues Conference.
“As we have seen from attendance at today’s National Fraud Issues Conference, the mortgage industry has come together to combat the burgeoning crime of mortgage fraud against lenders and innocent consumers,” said Kurt Pfotenhauer, senior vice president of government affairs at MBA. “Yet, mortgage fraud continues to increase and affect more and more companies and communities. The MARI report helps the industry understand where we need to focus our efforts in combating mortgage fraud.”
Some highlights in the report include the following:
- Florida had the most reported mortgage fraud against lender cases for 2005, followed by Utah, Georgia, Colorado and Illinois.
- Georgia, which had lead the nation in total reported mortgage fraud against lender cases from 2002-2004, has dropped to third position for mortgage fraud. MBA believes this is likely due to aggressive efforts at the state level, including passage of the Georgia Residential Mortgage Fraud Act one year ago.
- 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 dropped 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.
“As the mortgage industry continues its efforts to fight mortgage fraud against lenders, it is vital that all segments of the industry work collaboratively,” said Merle D. Sharick, manager of national business development for MARI. “MARI is pleased to be part of this effort by providing current data to MBA members through our fraud report.”
MARI provides MBA members the annual reports as well as discounted fees to participate in MARI’s database, the Mortgage Industry Data Exchange (MIDEX®). The MIDEX® system allows mortgage lenders, insurers and agencies to exchange information about companies and professionals that have been involved in loan transactions containing alleged fraud or material misrepresentations.
MBA and MARI have also joined forces to provide the Mortgage Fraud Alert System (MFAS) to MBA member companies. This system issues periodic alerts to MBA members about suspicious activities related to mortgage lending.
A full copy of the report will be available on MBA’s Mortgage Fraud Against Lenders Resource Center website, http://MBAFightsFraud.MortgageBankers.org.