A new report has been released by the LexisNexis Mortgage Asset Research Institute, stating that the reported incidents of mortgage frauds increased by 7 percent from 2008 to 2009. This increase is on top of the 26 percent increase that occurred between 2007 and 2008.

Mortgage fraud is a serious problem, as it increases the risk taken on by lending agencies. Even though the percent increase did not increase nearly as much as it did in 2007, that does not mean the problem is going away. It is extremely important for the mortgage industry to reassess their application process and ensure program compliance in order to fight fraudulent activity.

The top fraud type accounting for this year's increase was application misrepresentation, which accounted for 59 percent of all fraud types. The next highest frauds were appraisal and valuation misrepresentation. The increase of this particular fraud over the previous year was 11 percent, moving from 22 to 33 percent. Other types of fraud accounted for included employment verifications, closing costs, deposit verifications, and credit reports.

Eight of the top ten states for mortgage fraud are found on the eastern half of the country, although Arizona has crept into the top five for the first time. Florida is ranked first, followed by New York, California, Arizona, and Michigan rounding out the top five. Virginia and New Jersey are new to the list. Midwestern states, such as Illinois and Ohio, exhibited the highest appraisal fraud throughout the country.

LexisNexis is a leader in providing solutions designed for professionals in the legal, corporate, and public sector markets. The Mortgage Asset Research Institute provides insight into the reported incidents of fraud and misrepresentations received from lending agencies.