Which States Have The Most Mortgage Fraud

Tyler Durden's picture

In a recent blog post by CoreLogic, the real estate consultancy has determined the regions of the U.S. that have the highest correlation with the National Mortgage Fraud Risk index.  The regions that are most highly correlated with fraud risk are areas that will be the best predictors of nationwide mortgage fraud.  In fact, one can look at a few highly correlated regions to predict fraud risk on a national scale.

The heatmap (figure 3) shows the correlation of each region to the National Trend.  Mousing over a region shows the region name, the tracking score, and the percentage level of the lowest to highest possible tracking score (-1.0 to 1.0).  The heatmap has two layers (that can be toggled in the top-right menu of the map), one for state and one for CBSA.  The CBSAs are limited to the top 50 CBSAs based on population.

California and Maryland have the highest correlation with the national trend for risk (see figure 2). 

The two states have tracking scores of 0.49 and 0.47 respectfully.  To put this in perspective, the next highest correlated state is Massachusetts with a tracking score of 0.1.  All other states have a tracking score less than a 0.  When California and Maryland are combined by averaging, the tracking score climbs to 0.72.  The correlation typically increases the more regions that are added because the national score is a combination of all regions.  However, the combined correlation gets worse when combining more states in descending order of correlation. It requires combining more than 6 states before it becomes better than combining California and Maryland alone.

Finding the states that are correlated is good but looking at smaller
regions is better.  Smaller regions have a reduced number of
contributing fraud factors to analyze
.  Along with the states, CoreLogic also
looked at the correlation for metropolitan areas, commonly referred to
as core-based statistical areas (CBSA).  Utilizing the same process, the
number of CBSAs that best fits the national trend can be reduced to
three.  CBSAs are smaller than states and are less likely to be
predictive of the national trend (see figure 1). 

However, combining
only three CBSAs provide a strong correlation to the National Fraud Risk
Trend.  The three CBSAs are Baltimore-Columbia-Townson with a tracking
score of 0.43, San Francisco-Oakland-Heyward with a tracking score of
0.26, and San Diego-Carlsbad with a tracking score of 1.6.
Boston-Cambridge-Newton is the only other CBSA with a tracking score
higher than 0.   The top 3 CBSAs combined has a tracking score of 0.64. 
Combining more CBSAs will slightly increase the correlation percentage
but not significantly.  There are 935 CBSAs in the Nation and the top
three most correlated CBSAs only cover 12.2 Million out of 319 Million
people (3.8%) in the US.

According to CoreLogic, the national trend is not influenced by the largest population CBSAs as one might expect, due to more fraud instances given a larger volume of mortgages.  The top three CBSAs based on population (New York City, Las Angeles, and Chicago) with the highest of the three having a tracking score of -0.96 and a combined tracking score of -1.0.  The same is true for CBSA’s with the highest fraud risk (Miami, Daytona Beach, and New York City), each one having a tracking score of -1.0.

Understanding the highly correlated regions helps to identify the contributing factors that lead to fraud.  When looking across the nation, the number of potential factors is large and with the combination of the factors, the number becomes very large.  This make it almost impossible to find the contributing factors.  It is useful to see that the correlated regions are limited to just a couple of CBSA because it might reduce the number of potential factors to the point allowing analysts to identify the contributing factors.  

* * *

Meanwhile, a separate analysis from Bankrate has revealed the Top 10 states for mortgage fraud: it found that Florida led the way by a large margin, with eight times the number of expected mortgage fraud investigations, according to the LexisNexis Mortgage Fraud Index. Nevada came in second, with just more than 2.5 times the number of expected investigations. Those two states showed some of the worst declines during the collapse of the housing bubble.

  1. Florida   
  2. Nevada   
  3. Arizona  
  4. Delaware   
  5. Illinois   
  6. New Jersey  
  7. California   
  8. Michigan   
  9. Georgia   
  10. New York   

The most common type of mortgage fraud involves false information on applications, according to the FBI. This category includes incorrect borrower names, lies about the borrower's job or income, misrepresentations about debts or assets, mismatched signatures, invalid Social Security numbers, and untruths about occupancy -- in other words, the borrower says the home will be a primary residence when it's really an investment property.

Other common types of fraudulent activity include: lying on tax returns and financial statements; Appraisal fraud; False information about the borrower's bank deposits; Faked verifications of employment; Fraudulent escrow or closing documents; Falsified credit documents.

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Billy the Poet's picture
Which States Have The Most Mortgage Fraud

 

Check the phone books for Awan.

GUS100CORRINA's picture

Which States Have The Most Mortgage Fraud

My response: The map is unbelievable. Of course, I would expect states with MARXIST PROGRESSIVE LIBERAL STRONGHOLDS and out of control mortgage markets to be at the TOP of the LIST.

secretargentman's picture

Great list of ideas for getting better terms there toward the end of the article. Thumbs up!

JRobby's picture

I'll take "the state with the most preposterously inflated real estate prices"  for $685,000 Alex!

toady's picture

...in other words, the borrower says the home will be a primary residence when it's really an investment property....ahem (me)ahem....

cossack55's picture

....and where does Linda Green live?

Déjà view's picture

Referring to which Banana Republic?

Son of Thor's picture

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spastic_colon's picture

they forgot Hawaii for gods sake........the veterans out there get totally screwed by the mortgage brokers as do all other borrowers....a mortgage broker will make 1.5-2.5% on the loan and then the RE agent makes 3-6% on the sale.....tell me that is NOT usury!!!

XlibertyX's picture

Indeed -- When you have seven (7) $400K mortgages taken out on one (1) property in about that many years, you can bet an Awan is behind it.

lumen ex lumine's picture

LOL When did Lake Michigan become a land-mass ? Not to mention half of Lake Superior. Michigan looks almost as big as California. Thank-you, Corelogic

Mazzy's picture

Obviously it has to do with house boats.

any_mouse's picture

Maryland is mangled.

Look at lower Alaska in the upper left. Looks tumescent.

Woodrox's picture

Good catch, i missed that one

silverer's picture

Gee, nobody is "fraud-free". No place left to run.

chubbar's picture

Can anyone tell me what the fuck difference this information makes? The banks/mortgage companies don't give a rats ass and neither does the US gov't (unless it buries some enemy of TPTB). Really, this shit has been going on since at least the early 90's and the only time it seems to matter is when they are looking for a scapegoat. Otherwise, the enforcement agencies don't do squat.

MsCreant's picture

Where the property values are pretty high too. Hmm...

Of course correlation is not causation or anything like that...

WTFUD's picture

All my dosh is in Stawks with margin calls coming in from JPM/Goldman any day now and Blackstone have the deeds to my Pad. Please advise!

SmedleyButlersGhost's picture

Which States Have The Most Mortgage Fraud

Buehler: ahh, the States with the most mortgages?

DEMIZEN's picture

whoever did the heat map:  don't lay financial and census data on top of a physical baselayer is not like your data relates to anything physical. practice makes the master.

secretargentman's picture

I'd assumed the article was going to be about fraud on the part of the lender. 

buzzsaw99's picture

probably matches up perfectly with the voter fraud map.

AKKadian's picture

It's pretty much all fraud at this point. But again there is money in fraud when the whole system is a criminal organization. Fraud seem like a minor offense a misdemeanor.!!!  

Rebelrebel7's picture

Did the banks know that there are credit ratings agencies and IRS records, like tax filings plus payroll stubs that can be used to verify these things in addition to drivers licenses?!

Lol! 

Mazzy's picture

Pfffft.  You don't even need any of that in order to vote.  Why would the banks want that stuff in order to make loans?

Besides, the banks don't care.  Your loan will instantly be sold off to a 3rd party servicer.  The bank gets paid to simply be a loan broaker and someone else holds the risk.

So long as it's all private I don't give a fuck.  When people start getting bailed out with MY tax money then I get pretty pissed.  Who wants to lynch a banker?

max2205's picture

Md?  You mean PG county 

Pigeon's picture

You don't think Montgomery county is full of sharks and shit,too?

any_mouse's picture

The mortgage lender works with the realtor to sell the property. The realtor gets their skim. The lender then sells the mortgage with a bundle of other mortgages. The lender gets their skim.

You can see why the realtor and the lender could give a shit.

Rebelrebel7's picture

The realtor does not service  the loan. The "lender" does, which is usually a bank, even though the government is the lender, and gets stuck with default, but hey, the bank gets the interest and foreclosed property!

Moving and Grooving's picture

I'm willing to bet that they either cannot by law ask about that, or the people being asked can't or won't tell them anything for fear of being sued. Sounds like Obama, doesn't it?

 

Now in the past I'd assumed that institutions like banks and title companies could get that info legally and without fear, but these days? No way.

eccitante's picture

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Terrorism is defined as “the use of violence and intimidation in pursuit of political aims”. This definition is the same definition used to declare ISIS and other groups, as terrorist organizations. AntiFa has earned this title due to its violent actions in multiple cities and their influence in the killings of multiple police officers throughout the United States. It is time for the pentagon to be consistent in its actions – and just as they rightfully declared ISIS a terror group, they must declare AntiFa a terror group – on the grounds of principle, integrity, morality, and safety.

VWAndy's picture

the other stats prolly don't go after the fraud im guessin.

currentsea's picture

florida the fraud capital of the world.  

JLee2027's picture

Having been ripped off in Maryland I can agree with this article.  My bank closed (as in paid off by the Fed and dissolved themselves) and the servicer tried to claim the mortgage.  They said it was owned by a trust. The trust just happened to have the same street address as the servicer.  I took it to a specialist who said it was, basically, fraud, and was robo-signed. The office of My Congressman (Elijah do-nothing Cummings) said they couldn't help, even though they had been assigned by Congress to investigate this exact fraud situation where servicers lie and claiming mortgages they actually didn't own. The person who claimed to have signed the note over transfering control to the trust (with no date or amount given) was a clerk who had no authority and denied signing the note.  A Doc X creation. I hired a lawyer, went to court, lost at all levels.

 

They're all crooks. 

 

I should be black. I would have a free home, gas, a welfare check, and an ObamaPhone

guru69's picture

Be grateful that at least you have a 9" penis

Utopia Planitia's picture

Oh, don't bad mouth poor Elijah! He's doing all he can for himself.  I mean, doing all he can to turn your state (country) into a burbling sewage pit! (just like the rest of his cohorts....)

Lost in translation's picture

Wow.

As I was reading your post, I was mentally building up to a concluding statement of, "I hired a lawyer, beat the tar out of them."

Just wow... unbelievable. Sorry, brother. = (

Moving and Grooving's picture

Similar here. My servicer just lost a big court case accusing them of fraud, but they're still happily carrying on like nothing happened. They should be in prison, not in business. I wish my mortgage was being serviced by an honest company, but alas, it isn't.

 

I think there are only two employees there. They also share an address with a phony insurance company. That part of the scam I'll leave to the courts also.

Ban KKiller's picture

Corelogic? THEY ARE THE BIGGEST FORGERS AND FRAUDSTERS!  Fucking hell! 

 

Remember Lenders Processing Services, LPS? Now they have been renamed "Black Knight". Google LPS vs. DOJ and see the facts. 

Black Knight and Core Logic, two massive criminal outfits. 

whatswhat1@yahoo.com's picture

BUZZWORDS:

2016-DISRUPT

2017-FRAUD

 

Ladies and gentlemen, boy and girls, it's all one big fraud.  Everything!  Everything!!  Everything!!! 

Moving and Grooving's picture

I could not agree more stongly. Man is humanity's biggest threat.

 

Some people scam on the phone for their bread. Some take money to attack innocent people. Some take money to pad their nests, and in return commit treason and espionage. Some people are foolish enough to be blackmailed or extorted into doing bad things.

 

And most of the rest of us are in the victim pool.

 

SmittyinLA's picture

Mortgage fraud funds criminal invasion as its designed to, that's why Jamie Gorelick runs our Deep State and isn't in prison for TREASON WITH IRAN
https://www.justice.gov/opa/pr/schlumberger-oilfield-holdings-ltd-agrees...

Its why she killed Able Danger, Able Danger would spit out mortgage fraud and voter registration fraud.

Pernicious Gold Phallusy's picture

Many of the so-called worst states in the list are shown on the map as some of the best states. Would this be considered mortgage fraud reporting fraud?

shining one's picture

Who gives a shit, this is not planet america.

Moving and Grooving's picture

I just got a call from my insurance co, or so they said in the message. The caller ID said 'Nebraska'. 

 

Like everyone in the West, I am inundated every day with fake phone calls, and as a resuly I trust no one or any institution. I think the call is yet another scam. People think they can get away with anything and everything, and generally they're 100% correct. If I report this, nothing will happen. Nothing. Nothing.

 

So I protect myself.