Florida is seeing high levels of mortgage fraud, especially in relation to investment properties.

Mortgage fraud fell 7.7% nationally according to mortgage fraud risk index from analytics firm Interthinx. However, fraud in Florida is growing due to the influx of investor money.

“Investment properties in Florida are significantly more risky overall than those purchased for owner occupation and especially in the employment/income fraud risk category, where investment properties present more than three times the risk for fraud than do primary residence purchases,” Interthinx said.

Fraud overall has been somewhat on a downward trajectory this year when looking at previous Interthinx reports.

When looking at counties like Miami-Fort Lauderdale-Pompano Beach Metropolitan Statistical Area, Interthinx found that those areas appeared in three of the four different types of fraud-risk categories.

Employment and income fraud – or misstatements about those factors – remain top concerns in Florida markets, where investment properties pose significant risks.

The mortgage-fraud risk index hit a score of 137 in the third-quarter, down 8% from the second quarter and 5% from a year earlier. It’s actually the lowest the index has been in two years, suggesting fraudulent activity related to mortgages is on the decline overall.

California also remains a hot spot of fraudulent activity, Interthinx noted. 

Six California metro areas were in the top 10 MSAs for overall fraud risk.

California and Florida remain the two riskiest states when it comes to fraud risk, accounting for half of the metros listed as very risky by Interthinx.

The decline in metros plagued with high levels of fraud risk can be attributed to states such as Ohio, Wisconsin and Michigan, which reported two fewer metros at risk of fraud each in the third quarter.

However, new areas ended up facing fraud risk. Among them were New Jersey’s Millville-Bridgeton and Ocean City areas, along with Yakima, Wash. and Spartanburg, S.C.

Arizona is the third riskiest state in terms of mortgage fraud risk. However, if you are concerned about identity fraud, Interthinx says Iowa City, Iowa leads the country with an identity fraud risk index that is up 118.4% from the second quarter.


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