Although suspicious activity in lending is down overall, mortgage fraud still remains a problem in certain areas across the country, according to the 15th annual Mortgage Fraud Report by LexisNexis.  

However, with the implementation of the Consumer Financial Protection Bureau’s Qualified Mortgage in January, there is still plenty of room for uncertainty for the future of the mortgage fraud, the report stated.

“It remains to be seen whether additional regulatory action like that taken by the CFPB will strengthen loan standards enough to see a marked decrease in defaults,” the report said. “If new home originations continue to climb after these quality guidelines are in place, what will the effect be on mortgage fraud?”

But until the effects of the rule can be seen in fruition, here are the 8 states with the most mortgage fraud cases.

8. Michigan (pictured above)

Barely squeaking into the top 8 list, Michigan’s Mortgage Fraud Index came in at 110. However, this is a significant improvement from 2011 when it was ranked in eighth place at 189.

7. California

California’s MFI hit 116 in 2012, a slight dip from 122 in 2011.

According to a report from the California Association of Realtors, California home sales dipped 5.9% from 2012 to 2013 as the market felt the pinch of tighter inventory levels and higher prices.

"In addition, housing prices are improving across the board, even reaching pre-2007 levels in parts of the Bay Area. Higher prices and rising rates as the Fed slowly tapers are additional factors in the sales slowdown evidenced in the December numbers," said Kevin Brown, CAR president.