Georgia is at the top of another report detailing problems in the nation’s housing market. This time, the state is sixth in the nation for reports of mortgage fraud in the LexisNexis Mortgage Fraud Report.
Georgia had about 50 percent more mortgage fraud over the last five years than it should based on the number of new home loans in that time, the report said.
That’s based on an index where 100 means a state has the level of fraud that corresponds properly with the number of new loans taken out. Georgia’s index for fraud in 2007-2011 was 145.
The report’s authors said there is good news, though: fraud in Georgia has dropped since the data company reported the state led the nation in 2005. And Georgia had less fraud than expected for loans originated last year, not even cracking the top 10.
“The regulators in Georgia and the [Georgia Real Estate Fraud Prevention & Awareness Coalition] are very involved and aware of what’s happening in the state, and we see that in Georgia specifically more so than other states in the country,” said Jennifer Butts, manager of data insight for LexisNexis Risk Solutions and one of the report’s authors. “So if we were to speculate, I would say that the regulators are taking it very seriously.”
The report also highlights an emerging problem across the nation: collusion between buyers and sellers. Report author Tim Coyle said the industry isn’t paying attention to that kind of fraud yet.
“They’re still looking at the flips-for-profit in ’07, right? No one’s looking at the short sales from an owner to his or her spouse with a different last name for a 50 percent reduction in price and they never even leave the home,” said Coyle, senior director of financial services at LexisNexis.
Coyle said Georgia is not among the worst states for this kind of fraud.
The data in the LexisNexis report includes only verified cases of fraud that involve industry professionals. But the federal government collects data on all suspicious mortgage activity, including borrower fraud. The U.S. Treasury Department reports nearly a thousand such cases in Georgia in the first three months of this year.