Mortgage Fraud Increases in Condo-Based Housing Markets
The condominium housing market is seeing an increase in mortgage fraud according to a recent report which reveals application frauds in states like Florida are on the rise.
"As the risk of fraudulent purchase transactions rises, understanding where risk lies is important," said First American Financial's Chief Economist Mark Fleming, according to National Mortgage News.
"Florida is one of the largest markets in the country with concentrations of condominiums in the large coastal markets. The combination of size and rising defect, fraud and misrepresentation risk in condominiums, makes Florida an important market to watch."
A First American chart showed Florida way above the National number of projected application defect risk. The report shows that after seeing some time in the clear, Florida's defect risk has increase 6.5% from September 2017.
What makes Florida such a target for increased application Fraud? Well, Fleming believes that could be due to the aftermath of Hurricane Irma. Though there are other factors that he points out.
"Florida is currently the third riskiest state according to the defect, fraud and misrepresentation risk index, and by far the largest state among the five most risky. The other states in the top five are Arkansas, Idaho, Wyoming and North Dakota," said Fleming, according to the report.
"This may be partly driven by the popularity of high-rise condominiums in Florida's large coastal metropolitan areas. Condominiums are the only property type for which defect, fraud and misrepresentation risk has increased in the last three months, up 1.1% nationally."
The effects of Hurricane Irma coupled with Florida's ever-growing condo market has created the perfect brew for a higher risk of application fraud. To learn more about this increase and why the condo market has seen a large increase in application fraud, click on the image above.