Reported incidents of mortgage fraud fell in 2011

ATLANTA (AP) — Cases of residential mortgage fraud reported by institutions in the home financing industry fell last year for the second year in a row, according to a new study.

The LexisNexis Risk Solutions Mortgage Fraud Report released Wednesday tracks verified instances of home loan fraud or misrepresentation by mortgage industry professionals, as reported by banks and other financial institutions.

The fraud could include a borrower falsifying information on loan documents but only if the borrower was conspiring with a mortgage industry professional.

The study found that mortgage fraud reports declined 35 percent between 2010 and 2011.

One factor in the decline is that mortgage loan originations sank to their lowest levels since 2001 last year, reflecting a sharp drop in sales of new and previously occupied homes.

Another is that fewer mortgage fraud schemes are taking place at the point where a buyer tries to get a home loan. Mortgage fraud involving the buying or selling of homes in some stage of foreclosure is becoming more common, according to the FBI.

Mortgage fraud investigations by the FBI resulted in 1,0……………. continues on Businessweek