It’s Mortgage Fraud Week at L.A. Land: Day 4 -- California Now 2nd in Nation in Mortgage Fraud

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Good Morning. Mortgage fraud in California is surging, and we now rank second in the nation in fraud. So says a new report prepared for the Mortgage Bankers Assn.

‘California’s reported fraud had been quite low in the past few years, and some industry experts have suggested that its problems were masked by high real estate appreciation. The recent slowdown in its housing market may explain California’s return to high ranking in this year’s report,’ says the report, prepared by the Mortgage Asset Research Institute.

The report notes a nationwide surge of 30% in fraud activity from 2005 to 2006, and contains this warning: ‘The current unsettled state of the subprime segment of the industry does not bode well for fraud in the coming year.’

The report says California ranks second to Florida in fraud, according to an index that adjusts for the size of each state’s mortgage industry. California has been climbing the fraud rankings -- it ranked 30th in 2002, 23rd in 2003, 19th in 2004, 8th in 2005, then 2nd in 2006.

Broken record department: Is there a prosecutor in California who is aggressively bringing fraud cases? We’d be happy to spotlight such a person, if such a person in fact exists.

Photo Credit: Reuters