Mortgage fraud risk declined during the first quarter to the lowest level measured since the middle of 2009, according to analytics firm Interthinx.

The company calculates the potential for fraud based on the frequency that suspicious activity is detected.

Nevada topped the list of riskiest states again after Arizona overtook it at the end of last year. The Silver State has been the riskiest state for mortgage lending since the second quarter of 2009, except for the fourth quarter of 2011, according to Interthinx. It’s also held the highest foreclosure rate for most of that time.

“As already low mortgage rates have fallen further to new historical lows, there has been a surge in refinancing activity,” the company said in its quarterly report. “The resulting change in the composition of loan applications is at least partly responsible for many of the trends seen over the last year.”

Interthinx said while overall mortgage fraud is on the way down, employment and income fraud is growing in risk. These indicators increased 5% in the first quarter and are up 18% from last year.

Kevin Coop, president of Interthinx, said employment and income risk rose high enough to include a detector in future software products that allow lenders to verify a borrower’s income 10 days before closing.


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