Mortgage Fraud: Florida Is Number One

Florida is once again ranked number one on the nationwide mortgage fraud index. The Sunshine State has had the highest spot on the mortgage fraud index for four of the last five quarters, according to Mortgage Daily. The index is based upon the number of active criminal and civil cases in which lenders have been defrauded into approving a short sale or loan. In the first quarter of 2012, the state of Florida was home to $260 million in mortgage fraud.

Nationwide, fraudulent loan activity was up slightly during the first quarter. The amount of loans purported to be fraudulent remained unchanged at $1.8 billion, according to the report.

Sam Garcia, founder of, indicates that the state continues to uncover fraud committed during the housing market bubble years ago. According to Garcia, the size of Florida's population, along with a market that is oversaturated with mortgage brokers, has contributed to the elevated fraud activity because there is simply more opportunity for fraud to occur under these conditions. Garcia also identifies a correlation between heightened fraud levels and foreclosure rates in Florida. Improved technology and fraud prevention efforts have worked to reduce losses on more recent property transactions, however.

Despite a rise in mortgage fraud of more than $140 million from the fourth quarter of 2011 to the first quarter of 2012, Florida recently reduced the size of the agency in charge of enforcing mortgage regulations. Because there are now fewer resources at the state's disposal, it may be years before the Florida Office of Financial Regulation comes forward to potential offenders with a claim. However, for those who are convicted of mortgage fraud, the penalties have increased. Those convicted of mortgage or real estate fraud can now face up to 30 years in prison and fines up to $1 million.

It is important for those accused of committing mortgage fraud to understand the implications of such an accusation. Especially in Florida, where rates of alleged fraud remain high, understanding your rights is more important than ever. An attorney with experience in representing those accused of mortgage fraud can help you do just that

Source: South Florida Business Journal, "Florida Top Mortgage Fraud Index, Hits $260M in Q1," Brian Bandell, June 25, 2012

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