The American City With Most Mortgage Fraud Risk

By Douglas A. McIntyre Published Oct 30, 10:30AM EDT

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The American City With Most Mortgage Fraud Risk — © mvp64 / iStock via Getty Images

The U.S. housing market has exploded. The carefully followed S&P Corelogic Case-Shiller Index showed home prices in America rose 19.8% in August compared to the same month last year. In three cities–Phoenix, San Diego, and Tampa–the number was up over 25%.

What has triggered the surge? Americans are relocating in large numbers. People have left the large and expensive coastal cities like New York and San Francisco to less expensive cities inland. Places like Boise have posted record increases in housing prices and demand. The home price increase has also been helped by mortgage rates that are extremely low. And, the fact that many Americans can work from home has caused people to think more about where they can simultaneously work and live.

There is a dark side to the housing boom. Real estate research firm CoreLogic has just issued its 2021 Mortgage Fraud Report.

The report covers data from the second quarter of this year. Among the primary conclusions:

Nationally, most fraud types showed increased risk. Transaction risk showed an increase of 34.2% year-over-year. Both income and property fraud risk decreased slightly, which aligns with the strong job market and home price growth.

About one out of 120 mortgage applications included fraudulent activity, the data show. The highest-risk mortgages were for investment property. The lowest risk ones were from VA-backed programs.

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There are several kinds of mortgage fraud categories. Among them are people lying about identity, income, jobs, current real estate debt, and situations where a third party is included in a transaction without that being disclosed.

Corelogic looked at fraud rates by both city and state. The cities review was of the top 100 U.S. metros by population. Corelogic created a “risk index.” The higher the number, the worse the risk.

The No. 1 city on the “Top 25 Metro Areas with the Highest Application Fraud Risk” was Las Vegas with a score of 251. It is followed by another very large city–Miami–with a score of 235. The list then jumps to a smaller, and poorer, city–Poughkeepsie–at 206. No other cities have an index above 200.

Click here to read The Most Expensive Cities To Buy A Home

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.