Ohio is a hotbed for mortgage fraud, ranking first nationwide in a new analysis.
The LexisNexis 15th Annual Mortgage Fraud Report says the state had two times the reported fraud and misrepresentation last year than it should have for loans issued.
Ohio was ranked 30th five years ago and has made a steady climb to No. 1 on the list. It was 14th in 2011.
“A red flag should go up for Ohio,” said Tim Coyle, LexisNexis senior director of financial resources.
He could not explain why the state took over the top spot, and LexisNexis doesn’t release specific data behind the rankings.
In the past, fraud investigations have been focused on Florida, New Jersey, New York, Nevada and California.
“Does that mean that they’ve tightened up and there’s been so much investigation that the fraud has moved to other states?” Coyle asked. “I don’t know.”
The rest of the top five, in order, were: New Jersey, California, Florida and Washington. The company relies on data submitted by major mortgage lenders, agencies, and insurers, and the fraud involves industry professionals.
The 17-page report says that suspicious activity fell 25 percent from 2011 to 2012. The majority of the fraud, 70 percent, involved misrepresentations on mortgage applications.
Ohio’s high ranking has some industry professionals scratching their heads.
“I could understand California, Arizona, Florida and Nevada that have had a real problem with property values,” said Marianne Collins, executive director of the Ohio Mortgage Bankers Association in Westerville. “I don’t understand it in Ohio where it could be coming from.”
She noted that the report relies only on Mortgage Industry Data Exchange (MIDEX) subscribers.
But she also said Ohio has had issues because of foreclosures.
“There have been some problems with short sale schemes and foreclosure rescue companies,” she said.
The report also noted that Ohio had the fifth-highest percentage of loans in default last year at 3.41 percent. Only Florida, Illinois, Hawaii and Nevada ranked higher.
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.