Report: Missouri drops from leading states for mortgage fraud

Missouri previously ranked sixth in the country for mortgage fraud in 2005 based on a fraud index compiled by the Virginia-based institute.

In the new report, Missouri was absent from the top 10. For 2006, Florida topped the list, followed by California, Michigan, Georgia and Utah, respectively. New York now ranks sixth on the fraud index.

Suspicious activity reports related to mortgage fraud nationally have risen from 3,515 in fiscal 2000 to more than 28,000 in fiscal 2006, according to recent statistics from the FBI and Financial Crimes Enforcement Network.

The report suggests that the number of suspicious activity reports represents the “tip of the iceberg,” because only federally regulated institutions are required to file the reports.

FBI agents in Springfield are actively investigating alleged mortgage fraud schemes, and the Missouri Department of Insurance, Financial Institutions and Professional Registration formed a statewide task force in March to combat mortgage fraud.

The most common forms of fraud in 2006 mortgage loan originations were in the areas of employment history and claimed income, according to the report.

The report also noted that a “significant surge” in 2006 mortgage fraud reports were received as the report was being finalized – data that would likely impact current state rankings.

This story originally appeared in SBJ’s May 29 free e-news Daily Update. Click here to register.