Risk of mortgage application fraud rises 10% in Iowa

Housing recovery, rise in mortgage applications causing rate triggering increases in fraud

George Ford
Published: September 26 2013 | 1:12 pm - Updated: 28 March 2014 | 8:59 pm in

The risk of mortgage application fraud nationally fell 5.6 percent year over year in the second quarter, but rose 10 percent in Iowa during the same period.

Among the states, Ohio saw its mortgage application fraud risk rise the most (30.1 percent), followed by Hawaii (19.6 percent). Iowa had the 8th-highest increase in mortgage application fraud risk.

Irvine, Calif.-based CoreLogic estimated that 19,700 applications had a high fraud risk in the quarter that ended on June 30, or 0.8 percent of the 2.4 million applications submitted.

Residential mortgage applications with fraudulent information totaled an estimated $5.3 billion nationally in the second quarter, down from $5.5 billion in same quarter of 2012, but up slightly from $5.2 billion in the first quarter of this year.

CoreLogic's Mortgage Application Fraud Risk Index is composed of six different components: income, occupancy, employment, identity, property and undisclosed debt.

Intentional misrepresentation of income on a mortgage application showed the greatest year-over-year increase in the second quarter at 13.3 percent. Quarter over quarter, income application fraud risk increased 7.5 percent.

Property fraud risk, or deliberate over- or under-valuing of a home to achieve illegitimate gains, showed the greatest decrease at 20.8 percent in the second quarter of 2013 compared to a year ago. On a quarter-over-quarter basis, property fraud risk decreased 7.1 percent.

"Since the beginning of 2012, mortgage application fraud risk has totaled more than $30 billion nationally," Mark Fleming, chief economist for CoreLogic, said in a statement.

"While the propensity toward application fraud risk has declined based on our index, as the housing market recovers, the volume of mortgage applications is rising and increasing the total amount of fraudulent mortgage loan application dollars."

The CoreLogic report follows the resolution of four Iowa mortgage application fraud cases in recent months.

On July 31, Des Moines Police Lt. Wade Charles Wojewoda, 45, of Grimes, was sentenced to three years of probation and six months of home confinement for receipt of proceeds obtained under false pretenses. The charge was related to the purchase a home Wojewoda and his wife, Bobbi Jo Wojewoda, bought in 2003.

On Aug. 16, Bobbi Jo Wojewoda, 43, was sentenced to 18 months of imprisonment followed by five years of supervised release for conspiracy to commit bank fraud count. Wojewoda used her position as an apprentice appraiser to prepare appraisals with inflated values to help herself, and others qualify for mortgage loans.

Bobbi Jo Wojewoda also failed to disclose material conflicts of interest to the mortgage lender when she performed appraisals on her own home and homes where she was the real estate agent.

On Sept. 13, Matthew Danielson, 36, and his wife, Jamie Bowers-Danielson, 35, of Ankeny were sentenced to prison terms for their involvement in a mortgage fraud scheme.

Bowers-Danielson was sentenced to 41 months of imprisonment for conspiracy to commit bank fraud and bank fraud charges. She also will serve five years of supervised release following her prison term.

Matthew Danielson was sentenced to a year and a day of imprisonment for bank fraud. He also was ordered to serve five years of supervised release following the completion of his prison term.

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