Georgia 4th in mortgage fraud

Georgia ranked fourth in the nation in reported mortgage fraud last year, according to a study released Monday.

The study, by the Mortgage Asset Research Institute, showed reported mortgage fraud nationally jumped 26 percent between 2007 and 2008, despite — or perhaps because of — the drying up of home financing.

“With fewer loan originations today, the data suggest that the economic downturn may have created more desperation, causing more people than ever before to try to commit mortgage fraud,” said Denise James, a director with MARI, a service of LexisNexis.

Georgia has been in the MARI survey’s top 10 for the past five years.

It led the nation in mortgage fraud in 2004 and 2005, but saw its ranking improve over the next two years.

The state was the nation’s seventh worst for mortgage fraud in 2007.

The MARI study is based on reports of alleged fraud or misrepresentation submitted by lenders, agencies and insurers. The study compares that to loan origination data collected under the Home Mortgage Disclosure Act and uses those figures to compute a Mortgage Fraud Index score. A score of 100 indicates that the reported fraud for a state is exactly what one would expect in terms of fraud rates and the number of loans. Georgia had a score of 180.

Rhode Island (315), Florida (279) and Illinois (215) topped Georgia in the 2008 report.

The report found familiar forms of fraud, like false property appraisals, both in Georgia and nationally.

It also identified new twists in today’s housing landscape, including foreclosure prevention schemes and fraudulent loans based on properties that aren’t likely to be finished.