Nevada has cleaned up its act when it comes to cases of mortgage fraud, according to a new report.
For the third consecutive year, Nevada has stayed out of the top 10 states in cases of mortgage fraud and misrepresentation. The report by the LexisNexis Mortgage Asset Research Institute only releases a top 10 list, but Nevada’s exclusion is an indication that mortgage fraud has declined in the state and is even lower than it should be based on the volume of loans, said Jennifer Butts, the institute’s manager of data processing and co-author of the report.
Butts said that’s usually a reflection that state regulators, lending institutions and others are doing a good job of monitoring and preventing fraud.
“It looks like the regulators and others are doing their jobs and paying attention,” Butts said.
Despite the improvement over the last two years, Nevada remains No. 2 in the nation in the LexisNexis fraud index that looks at cases between 2006 and 2010. Cases of mortgage fraud contributed to the run-up in values in the Southern Nevada housing market that ultimately led to its nation-leading foreclosure rate and price collapse.
The index is determined by reports from mortgage companies, lending institutions, brokerages and insurers.
Florida was ranked No. 1 in fraud cases from loans originated in 2010. It was followed by New York and California.
Florida is also ranked No.1 in the cumulative list of 2006 to 2010. After Nevada’s No. 2 ranking is Arizona, Georgia, Michigan, California, Illinois, Minnesota, Maryland and Virginia.
Nationally, reports of fraud and material misrepresentation decreased 41 percent between 2009 and 2010, the first time there’s been a decrease in several years, Butts said.
The decrease doesn’t necessarily relate to occurrences of mortgage fraud, which industry sources say are still rising, Butts said.
The decline brings the number of cases reported to 2006 levels, she said. The decrease in reports is believed to be attributed to a decrease in loan originations, fewer resources available to investigate and report incidents and a stronger network that encourages professionals to report fraud, Butts said.