Trusting Utah Population Help Make It Mortgage Fraud Capital


Utah is the U.S. mortgage fraud champion, say data from the Mortgage Asset Research Institute (MARI) reported by the Salt Lake Tribune. On a per-capita basis, Utah has 2 1/2 times the national average of loans containing alleged fraud or serious misrepresentation, said Jim Croft of MARI. In the category of subprime loans made to people with marginal credit, the rate of fraud is three times the national average. The state’s dubious distinction is bad news for consumers. Utah lenders say residents pay about one-quarter of a percentage rate higher on home loans than people elsewhere because of the high level of fraud and increased risk of default. California moved up the list from No. 8 to No. 3.

Mortgage fraud takes many forms, including: A buyer lies on a loan application. A mortgage lender inflates someone’s income so they can qualify for a loan. A crook uses someone else’s Social Security number and uses it to buy a home. No one is sure why Utah has such a high rate of fraudulent activity. One suspicion is that unscrupulous lenders try to qualify too many heavily indebted Utah families for homes they cannot afford. Another is the makeup of Utah’s trusting population, where many people place a great deal of trust in community, religious leaders, and authority figures. FBI agent Jim Malpede says, “Mortgage fraud has been rampant here for years.”


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