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California and Florida led the nation in incidents of suspected mortgage fraud last year, with Los Angeles and Miami heading the list of metropolitan areas with the most reported incidents. 

The two states accounted for 42 percent of all subjects identified in mortgage fraud suspicious activity reports in 2009, according to new figures released this week, with roughly half of each state’s total coming from the two cities.   Overall, reports of possible mortgage fraud were up 4 percent in 2009, according to the U.S. Treasury’s Financial Crimes Reporting Network, which released its 2009 Mortgage Loan Fraud Study on Friday.     Reported cases of “mortgage fraud suspicious activities,” as the report describe them, have risen sharply in recent years. From 26,000 reported cases in 2005, the number more than doubled to 65,000 cases in 2008. The 4 percent increase in 2009 marks a slackening of that rise, to 67,500 cases, although the report notes the pace began quickening in the last quarter of the year.   California reported more than 26,000 subjects of suspicious activity reports, individuals who may be committing fraud, in 2009, with more than 10,500 in the Los Angeles Metropolitan area. Florida reported more than 18,000 subjects, with more than 10,000 from the Miami metropolitan area.   The Treasury report breaks out state and metropolitan statistics differently than it does national figures; each case of suspicious activity may involve one or more subjects; a total of 106,000 subjects were identified nationally in 2009.   By comparison, New York, the #3 state on the list, had only 5,600 suspicious activity subjects reported. Ironically, the total for the New York City metropolitan area, which includes parts of New Jersey and Pennsylvania, exceeded the state total, with 7,200, and was the third-highest metropolitan area on the list.   Rounding out the top 10 metropolitan areas were Chicago, Riverside (Calif.), Washington (D.C.), Phoenix, Atlanta, San Francisco and Detroit.   Of the subjects in 2009 mortgage fraud suspicious activity reports, nearly half (46 percent) were described as borrowers, 12 percent as real estate professionals, 10 percent as brokers and 5 percent as assessors. Reports are submitted by lending institutions that suspect possible fraud.      

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