APPRAISAL FRAUD RISING
Fraud in the appraisal increased from 22% of all fraud reported in 2008 to 33% in 2009, according to the Mortgage Asset Research Institute 2009 Mortgage Fraud Report. The Institute reviewed data regarding fraud in federally insured loans. Surprisingly, according to the report, mortgage fraud rose in 2009, even though the total number of new loans declined.
Mortgage fraud reports (suspicious activity reports) rose from 5% to 8% from 2008 to 2009. Arizona is now the 4th worst state in the Country for mortgage fraud. Arizona has approximately 58% more incidents of reported fraud than anticipated for the number of new loans in 2009. Fraud in the appraisal (such as selecting incorrect comparables or making unsupported adjustments) was one of the main types of fraud that dramatically rose, according to the report.