Mortgage Bankers Association Releases 2006 MARI Mortgage Fraud Report

WASHINGTON, DC.- The Mortgage Bankers Association (MBA) today announced that the Mortgage Asset Research Institute, LLC (MARI®), a ChoicePoint® (NYSE: CPS) Service, has delivered its Ninth Periodic Mortgage Fraud Case Report to MBA. The report examines the current state of residential mortgage fraud and misrepresentation in the United States based on participating lenders’ reports to MARI.

MBA has been a leader in raising the national profile of mortgage fraud against lenders and bringing together all those who are affected by fraud to help find solutions. MBA is leading an effort to obtain an additional $6.25 million annually for the FBI to hire additional investigators and prosecutors solely responsible for dealing with cases of fraud against lenders. In addition, in March, MBA signed an agreement with the FBI to promote the use of the FBI’s Mortgage Fraud Warning Notice.

“Fraud against mortgage lenders is a growing concern to all who have a stake in our industry,” said John M. Robbins, CMB, Chairman of the MBA. “While we continue to try to get our arms around the full scope of the problem, the MARI report significantly helps the industry better understand where we need to focus efforts in defending our companies and communities against mortgage fraud as it increases in frequency across the nation.”

Some highlights in the report include the following:

* The number of 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. Additionally, incidents of mortgage fraud are now more evenly distributed across nearly all states whereas, in prior years, reports tended to be concentrated in relatively few states.
* There are changes in the rankings of the states in terms of their mortgage fraud experience, with Florida taking over the top spot and Georgia showing the greatest improvement from prior years’ rankings.
* The most common types of fraud found to date in 2006 originations are in the areas of employment history and claimed income.
* 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.

“Collaboration is the key for the mortgage industry as it continues its efforts to fight mortgage fraud against lenders,” said Merle D. Sharick, Vice President and National Manager of Business Development for MARI. “MARI is pleased to be part of this effort by disseminating current data to MBA members through our annual fraud report.”

MARI provides MBA members the annual reports as well as discounted fees to participate in MARI’s database, the Mortgage Industry Data Exchange (MIDEX). The MIDEX system allows mortgage lenders, insurers and agencies to exchange information about companies and professionals that have been involved in loan transactions containing alleged fraud or material misrepresentations.

MARI also offers the Mortgage Fraud Alert System (MFAS). This system issues periodic alerts to subscribers about suspicious activities related to mortgage lending.

A full copy of the report is available on both MBA’s website, www.mortgagebankers.org and on MARI’s website, http://www.mari-inc.com/reports.html.