The worsening state of the real estate industry as well as the economy as a whole has resulted to an increase in the number of mortgage frauds with Rhode Island on top of the list. A study released by the Mortgage Asset Research Institute shows that the number of frauds made on loans last year is up by 26% compared to the previous year. The increase came as a result of tightened mortgage standards imposed by lenders which have made it more difficult for borrowers to qualify for home loans without good credit, large down payments and proof of income.

Only $1.4 trillion worth of home loans were made last year due to the tight credit rules. This is less than the amount of home loans made during the previous year. Because of this, there is pressure on borrowers to lie when filling out their loan applications. The same is true for mortgage brokers and lenders.

Over 60% of last year’s mortgage fraud cases were from falsified applications, 28% were from financial statements and tax returns while 22% were from appraisals.