Mortgage fraud is on the rise, increasing 3.2 percent since the same period last year and amounting to about $19.8 billion in applications that contained elements of fraud or serious misrepresentations for the year, according to CoreLogic’s latest Mortgage Fraud Report. 
In this year’s second quarter, about 11,100 mortgage applications contained elements of fraud, compared with 19,700 applications in the second quarter of 2013 (when the total application volume was substantially higher as well), according to CoreLogic’s analysis.
Other findings from the report:
• Florida saw the highest year-over-year growth in mortgage application fraud risk, while Arizona saw the largest decline in fraud, CoreLogic reports.
• Jumbo mortgages were found to have the highest fraud risk, followed by low-down-payment mortgages.
• Maintenance that has been deferred on some properties, along with quick price appreciation for other properties, has caused big discrepancies in values among nearby properties, which has led to an increase in opportunities for incorrect valuation and fraud-for-profit schemes. Such fraud was found most often in judicial foreclosure states and high vacancy areas.
Among the 25 largest metros, the following cities had the largest year-over-year growth rate in mortgage fraud:
- Miami-Fort Lauderdale-West Palm Beach, Fla.: 113.2%
- Tampa-St. Petersburg-Clearwater, Fla.: 61.2%
- New York-Newark-Jersey City, N.Y.-N.J.-Pa.: 59.3%
- Pittsburgh, Pa.: 52.6%
- Chicago-Naperville-Elgin, Ill.-Ind.-Wis.: 30.6%
- Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.: 25.4%
On the other hand, of the 25 largest metros, the following cities posted the largest year-over-year decreases in mortgage fraud:
- Phoenix-Mesa-Scottsdale, Ariz.: –31.9%
- Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.: –24.8%
- Denver-Aurora-Lakewood, Colo.: –24.3%
- Minneapolis-St. Paul-Bloomington, Minn.-Wis.: –20.6%
- Atlanta-Sandy Springs-Roswell, Ga.: –19.8%
- St. Louis, Mo.-Ill.: –16.7%
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Source: CoreLogic
