Mortgage fraud risk remained "essentially unchanged" in the third quarter of 2010 compared to the second and down from a year ago, according to Interthinx's Quarterly Mortgage Fraud Risk Index. However, the data analytics firm said emerging trends suggest a shift from fraud for profit to fraud for homeownership. Interthinx reported the risk index for 3Q at 144, down 0.9% from last quarter and 1.4% from the same time last year. The index is calculated based on the frequency that indicators of fraudulent activity, such as property mis-valuation, employment misrepresentation or concurrent closing schemes, are detected in mortgage applications processed by Interthinx. A value of 100 on any given index represents the normal level of fraud risk. Nevada and Arizona have the highest mortgage fraud risk at indices of 254 and 214, respectively. California came in at 190. The states with the lowest mortgage fraud risk indices are, in descending order, Wyoming, Maine, West Virginia, Mississippi and Kansas. The five lowest ranking states have an index less than half the national average. (Click on chart to expand.) Interthinx tracks four type-specific fraud risk indices. The identity fraud and employment/income fraud risk indices both spiked in 3Q compared to a year ago, up 24% and 23%, respectively. This, Interthinx said, suggests an increase in "fraud for property," a fraud niche that has long been considered less dangerous than other types. Fraud for property is essentially fraud to attain homeownership and is measured against "fraud for profit." The identity fraud increased to 189 in 3Q, up 5% from 2Q and up 24% from 3Q09. The Cleveland metropolitan statistical area topped out the index at 395, a 7.7% increase from last quarter and a 47.5% increase from last year. Miami-Fort Lauderdale-Pompano Beach; Honolulu; Akron, Ohio; and Naples-Marco Island, Fla. rounded out the five MSAs with the most identity fraud. The employment/income fraud risk index increased substantially to 94, up 11.2% from 2Q and up 23.1% from 3Q09. The Burlington-South Burlington, Vt. metro area came in first on the index at 155. That number is up 64.7% from the previous quarter and up 43.4% from the same period last year. "Since frauds for property sparked the mortgage meltdown as unqualified borrowers began to default in large numbers, it is clear that frauds for property must be identified and addressed going forward with the same urgency as frauds for profit," the report said. Write to Christine Ricciardi.