Mortgage fraud increased 26 percent in 2008 compared to 2007, according to a study released Monday by the Mortgage Asset Research Institute.
The increase reflects fewer loans. About $1.4 trillion in home loans were made in 2008, down a third from the previous year.
More than 60 percent of the mortgage fraud cases last year were tied to falsified applications; 28 percent reflected falsified tax returns or financial statements; and 22 percent were related to appraisals.
The fastest-growing scams, the report said, are perpetrated by foreclosure prevention specialists, who offer to rescue distressed borrowers, then flee with their money.
The 10 states with the most fraud (in descending order) were:
- Rhode Island
- New York
Source: The Associated Press, Alan Libel (03/19/2009)