After reaching its lowest mark in almost three years in the first three months of 2012, Interthinx’s national mortgage fraud risk index trended up again in the second quarter.
Through the second quarter, the fraud risk index is 149—normal is 100. This figure is a 6.7% quarter-over-quarter increase and is up 4.5% from a year ago.
The Agoura Hills, Calif.-based risk mitigation firm said the second quarter change was primarily driven because 91 metropolitan statistical areas moved into the “very high risk” category, compared to only 63 the previous quarter.
With a 30.3% increase in fraud risk from the prior quarter, Chattanooga, Tenn. became the riskiest metropolitan area for mortgage fraud. Modesto, Calif. is only one point behind Chattanooga, followed by the Florida markets of Miami-Fort Lauderdale and Cape Coral-Fort Meyers.
Despite experiencing a small decrease in overall fraud risk over the first quarter, Nevada and Arizona continue to remain the riskiest states throughout the country.
These states have been the top two since 1Q 2010.
The third riskiest state for mortgage fraud is Florida. Contributing to the Sunshine State’s ranking is its dominance of the overall and type-specific top ten lists, where Miami-Fort Lauderdale-Pompano Beach, Cape Coral-Fort Meyers and Port St. Lucie all are among the top cities nationwide with the potential for mortgage fraud, property valuation fraud and occupancy fraud. Additionally, four of the riskiest ZIP codes for mortgage fraud reside in Florida.
For the first time since Interthinx started this report in the second quarter of 2009, California is not one of the top five riskiest states. Georgia surpassed the Golden State for the fifth spot due to a 15-point index gain from the first quarter.
Despite moving to sixth in overall mortgage fraud risk throughout the country, California cities took nine of the top 10 spots for employment/income fraud risk and San Jose was the riskiest metro for identity fraud with an index value 20% higher than its nearest competitor, Charlottesville, Va.
“This report shows that overall fraud risk is rising and is migrating geographically, as evidenced by Georgia and the rise in risk in the southeastern United States generally,” said Kevin Coop, president of Interthinx.
