Fraud Risk In The U.S. Goes Up

*Fraud Risk In The U.S. Goes Up*
**New Research Released**

***Interthinx has released its quarterly Mortgage Fraud Risk Report covering data collected in the second quarter of 2012. According to the most recent analysis, overall risk resumed its upward climb after a one-quarter pause, with the Index value rising nearly 7 percent to 149 (n = 100). The change was primarily driven by the recent inclusion of 91 metropolitan statistical areas (MSAs) that moved into the “very high risk” category. That includes Chattanooga, Tennessee, which — with a quarter-on-quarter increase of more than 30 percent in its Index value — is currently the riskiest MSA in the country. In addition, Georgia has joined the top five states for overall mortgage fraud risk for the first time since the report started in second-quarter 2009. Other notable findings include:

****>> The New York City MSA continued its precipitous rise in the rankings, climbing to sixth place in the current quarter from seventeenth place just six months ago. In addition, five New York City area ZIP codes — including three in Brooklyn — are now among the top ten riskiest ZIPs in the nation.

****>> Nevada and Arizona remain the two riskiest states despite experiencing a small decrease in overall fraud risk over last quarter. Nevada’s Index value is currently 208, and Arizona’s is at 206. The MSAs for Las Vegas-Paradise, Nevada, and Phoenix-Mesa-Scottsdale, Arizona, are notably absent from the list for the first time since fourth-quarter 2009.

****>> Florida remained the third riskiest state, with a Fraud Risk Index value of 199. Contributing to Florida’s ranking is its dominance of the overall and type-specific top ten lists: Miami-Fort Lauderdale-Pompano Beach, Cape Coral-Fort Meyers, and Port St. Lucie for overall risk at the MSA level; two of the riskiest MSAs for Property Valuation and one for Occupancy Fraud; and four of the riskiest ZIP codes.

****>> For the first time since the inception of this report in second-quarter 2009, California is not in the top five and is replaced by Georgia. Despite California’s overall decline in fraud risk, its metros are well represented in all the top ten lists, taking nine of the top ten spots for Employment/Income Fraud Risk. The San Jose-Sunnyvale-Santa Clara MSA was the riskiest metro for Identity Fraud Risk with an Index value of 280 — 20 percent higher than its nearest rival.

****>> Fraud risk for condominiums differs from that of single-family homes. In particular, condos are more at risk for Employment/Income and Identity Fraud Risk but less at risk for Property Valuation Fraud Risk. Geographically, the difference in risk between census divisions varies as well, with condos presenting less risk in the East North Central, Middle Atlantic, and New England divisions and having more risk in the West North Central Division.