National mortgage fraud risk is down 2.3% from a year ago and is 1% lower than the previous quarter, but is still at an elevated risk, Interthinx said in its latest Mortgage Fraud Risk Report.
According to the Agoura Hills, Calif.-based firm, the changes coincide with lender reports that borrower quality has greatly improved.
For the fifth consecutive quarter, Nevada and Arizona are the two most risky states for fraud. California, which contains five of the ten most risky MSAs, is now the third highest state for fraud risk after holding the fifth spot last quarter. Florida and Colorado, which jumped eight spots in the report, round out the top five states.
The ten states with the lowest fraud risk include West Virginia, Kansas, Iowa, Maine, Kentucky, New Mexico, Nebraska, Wyoming, Mississippi and Montana.
The report also found a shift in fraud risk for local zip codes. Two zip codes in Chicago had the highest fraud risk for the last four quarters, but as of this report, the Chicago area does not appear in any of the top 20 fraud indices—identity, occupancy, property valuation and employment/income—the firm tracks.
The recent decrease in mortgage fraud risk in the Chicago zip codes was as dramatic as it was sudden as the city has been drawing attention for a year,” said Kevin Coop, president of Interthinx. “It suggests that when the industry has actionable intelligence and increases its scrutiny of an area, word gets out and the fraudsters move on.”
