Mortgage fraud reached a new high in 2008, according to the FraudBlogger index published by MortgageDaily.com, during which time more than $5 billion in mortgage fraud cases were tracked. "Mortgage fraud activity that might have otherwise gone undetected was uncovered as falling home prices and rising defaults pushed these crimes to the surface," said MortgageDaily.com publisher Sam Garcia. The FraudBlogger index, which reflects a combination of the number of cases and the dollar volume was 1488 last year, up from just 607 in 2007. In terms of dollar amount, Fraud cases in 2007 amounted to about 4 billion, about 25 percent less than in 2008. Fourth-quarter 2008 activity nearly doubled from the prior quarter and was nearly 300 percent higher than a year earlier, the report said. More than $1 billion in fraud was tracked in California alone, during the fourth quarter, pushing it to the top of the fourth-quarter state rankings. Much of that increase, according to MortgageDaily.com's report, was tied to around 11,000 mortgage fraud investigations reported by the U.S. Attorney in San Francisco. New York ranked number two in the top ten worst states, with a much less, although still significant, $374 million in fraud cases. Florida, Minnesota, Nevada, Virginia and Texas followed. "Although fraud is being uncovered at an increasing pace, the actual level of fraud on more recent originations has likely tumbled as production has dwindled and lenders have tightened guidelines," suggested Garcia. Nonetheless, many industry insiders fear that mortgage fraud will continue to increase. Representative of the fear are the solutions technology companies are rolling out in order to mitigate fraud. David Vida, president of Acqura Loan Services, said the concern is that modification fraud and even short sale manipulations will worsen, especially as press continues to grow around what the government will do with principal forgiveness. "The concern is that people will manipulate the sitation and take advantage of free-bees, if you will," Vida said. Write to Kelly Curran at kelly.curran@housingwire.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.