According to the Mortgage Bankers Association (MBA) and the Mortgage Asset Research Institute (MARI), “The number of [fraud] reports in MARI’s Mortgage Data Industry Exchange (MIDEX®) database pertaining to 2006 originations is approximately 30 percent higher than the number of reports in the 2005 book of business at the same time last year.”
Also noted: “The most common types of fraud found to date in 2006 originations are in the areas of employment history and claimed income,” and “California’s reported fraud had been quite low in the past few years, and some industry experts have suggested that its problems were masked by high real estate appreciation. The recent slowdown in its housing market may explain California’s return to high ranking in this year’s report.”
Over the past four years, the state of California has jumped from 30th to 2nd (behind only Florida) in terms of the MARI fraud index (pdf).
∙ Mortgage Bankers Association: 2006 MARI Mortgage Fraud Report [ChoicePoint]
∙ Nineth Periodic Mortgage Fraud Case Report (pdf) [MARI]
C’mon everybody, keep bidding those prices up! Keep flipping the stucco! With a little work, I KNOW we can make #1 by year end!! GO CALI!!
why would all those ‘wealth effect’d californias need to lie about their employment and income?
could it be because …
4Q 2006 1yr Ago 5yrs Ago Average Dev. from Avg.
Percent Income 47 48 36 35 +34%
Mortgage/Rent 1.9 1.6 1.2 1.3 +46%
Price/Income 8.0 8.2 5.9 5.9 +35%
Price/Rent 393 336 222 252 +55%
http://www.housingtracker.net/affordability/california/san-francisco
There used to be a billboard on I-10 West heading through L.A. advertising a local mortgage brokerage. Probably one of the ones that blew up recently. Ad read, “Buy the house you want, not the one you can afford.” Hilarious.
So many people are so deep in this bubble they can no longer see the forest for the trees.