Based on the findings of a LexisNexis study, reported incidences of fraud are on the decline. The Financial Crimes Enforcement Network fielded 25 percent fewer suspicious applications last year compared to 2011, according to the report, while FBI statistics show the number of pending mortgage fraud cases down to 1,954 in fiscal year 2012 from 2,691 in fiscal 2011.
The industry is now most vulnerable to loan origination fraud, LexisNexis discovered, whereas distressed homeowner fraud previously posed the biggest threat. The study also noted that the higher a state's rank on different distressed property indicators, the higher the rate of mortgage fraud. "With Consumer Financial Protection Bureau mortgage regulations going into effect in January 2014, and demanding new rules for quality loans, it will be interesting to see what impact this has on overall mortgage defaults," remarked Tom Brown of LexisNexis.