When it comes to mining money through mortgage fraud, California is part of the new gold rush, according to a new report Tuesday from CoreLogic (NYSE: CLGX), a Santa Ana-based provider of consumer, financial and property information and business services.
The report says that fraud risk in the mortgage industry has declined by 25 percent since it peaked in the third quarter of 2007 but that California, Florida, Georgia and the Carolinas lead the nation in mortgage crooks.
California seems to have a lock on having the most fraud involving home equity lines of credit, the report says.
“Lenders’ aggressive stance against fraud is having an impact. Our 2010 Fraud Index indicates that mortgage fraud risk is on the decline. But with an estimated $14 billion in fraud losses experienced in 2009 alone, fraud is still a major issue for the mortgage industry,” says Tim Grace, senior vice president of Fraud Analytics, CoreLogic.
Short sale volume from first quarter of 2008 through fourth quarter of 2009 increased by more than 300 percent.
Nearly one in every 200 short sales were deemed “very suspicious” by lenders, meaning there was a new sale transaction less than 60 days after the short sale and the sale price was more than 20 percent higher than the short sale price.