Affinty Corp releases 4th quarter fraud index
By MortgageDaily.com staff
2/13/2003

Mortgage fraud decreased nationally overall during the fourth quarter, according to the quarterly National Fraud Report from a fraud-prevention company. Some states remain constant offenders, however.

Affinity Corp's index maps shows California, Georgia, Missouri, and Nevada had the consistently highest suspected fraud activity during the quarter. The suspect activity included identity theft and property fraud.

California's fraud woes are exemplified in the recent case against former CEO of PinnFund U.S.A., Michael J. Fanghella, who was sentenced earlier this month to 10 years in federal prison for being a coconspirator in a more than $300 million Ponzi scheme. The fraud case was one of the biggest in Southern California history.

Other high fraud-rated states on the general fraud overview that Affinity released were Arizona, Minnesota, Ohio, Oregon, Texas, Vermont, Wisconsin, and Wyoming.

The index is based on information from recent loan applications nationwide.

"Our vast network of fraud data allows us to identify specific trends in fraudulent activity, educating people to the extremity of the problem in order to heighten their awareness for a need to prevent fraud," said president Kevin Coop.

The "good" states on Affinity's index maps were Indiana, Kentucky, Michigan, and New Jersey, which had the consistently lowest fraud index levels during the quarter. Other states that rated low on the fraud index were Alabama, Alaska, Arkansas, Hawaii, Iowa, Montana, New York, North Dakota, Pennsylvania, and Virginia.

All other states fell in the two categories between high and low.

While New York is listed low on the fraud index, it recently hosted a $67 million mortgage fraud case in January. A group of brokers in cahoots with a builder were accused of selling Rochester-area properties with artificially inflated prices. About a dozen lenders were defrauded during the six-year scheme.

"By releasing these reports quarterly, we reveal the trends about fraudulent activity and, hopefully, encourage lenders to reconsider the methods they use to perform due diligence on loans," Coop said.

Affinity's automated Electronic Loan Review scores loan transactions based upon a detailed analysis of transactions submitted by lenders, insurers, investors, and brokers. The system is a predicative indicator of mortgage fraud, the company said.

Affinity, a provider of mortgage fraud prevention tools, was founded in 1998 and is based in West Hills, Calif.

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