America's Mortgage Fraud Capital? New York, N.Y.

Before you go, we thought you'd like these...
Before you go close icon
New York is Nation's Leader in Mortgage FraudStart spreading the news: New York City -- home to embattled investment banks and notorious fraudster Bernie Madoff -- has another infamous distinction to add to its list. According to a new report, the metro area is the nation's leader for mortgage fraud in 2009.

As cases of fraud skyrocketed across the country last year, New York City rose to the top, claiming 12 percent of the nearly 70,000 reports of suspicious activity filed nationwide; this according to a report by LexisNexis. Los Angeles came in second with 8 percent and Chicago was third with 5 percent.

Even with data indicating a steep climb nationally in the number of fraud incidents over the past two years, researchers admit that more unlawful mortgage activity goes undetected.In 2009, reported fraud cases across the country increased 7 percent, but comparatively, from 2007 to 2008, occurrences of fraud spiked 26 percent. "While this is a noticeable increase [this year], we believe that mortgage fraud is significantly understated," said Jennifer Butts, co-author of the report by LexisNexis' Mortgage Asset Research Institute.

The majority of the fraud, or 59 percent, fell under application misrepresentation, which is falsifying details such as employment, debt, or property value -- the most common type of fraud for the sixth straight year.

Appraisal and valuation misrepresentation, a distortion of value inflation for a home, came in second -- jumping to 33 percent in 2009 from 22 percent the previous year.

New York State, however, avoided topping the state rankings, which were also included in the report. Florida took the honors of No. 1, followed by New York, and California took third.
Read Full Story

Find a New Home

Buy
Rent
Value
Powered by Zillow

From Our Partners