Instances of mortgage and valuation fraud are on the rise, CoreLogic reported Oct. 28 in its 2014 Mortgage Fraud Report. 

During the second quarter, an estimated 11,100 mortgage applications, or 0.69 percent of all mortgage applications, contained fraud, as compared with 19,700 or 0.67 percent in the second quarter of 2013, when the total application volume was substantially higher.

The CoreLogic Mortgage Application Fraud Risk Index increased 3.2 percent nationally between the second quarter 2013 and second quarter 2014. CoreLogic estimated that fraudulent mortgage applications totaled $19.8 billion in the 12 months ending June 30. 

The report noted that a significant increase in new single-family rentals since 2006 has elevated risk because it increases the opportunity for property occupancy fraud.

Valuation fraud posed the biggest risk, increasing 3.3 percent between the second quarter 2013 and the second quarter 2014. However, the risk decreased 8.7 percent from the first quarter to the second quarter 2014.

CoreLogic noted that value discrepancies between properties with deferred maintenance and nearby residences experienced rapid appreciation. This issue has been most prevalent in judicial foreclosure states and areas with high-vacancy rates.

States with the greatest mortgage fraud risk are, in order: Florida, Nevada, New York, Rhode Island and Hawaii. 

The states with the greatest increases in mortgage fraud risk between the second quarter 2013 and second quarter 2014 are Florida (up 72.6 percent), New Jersey (up 62.4 percent), New York (up 58.2 percent), Mississippi (up 34.5 percent) and Connecticut (up 33.8 percent). 

Meanwhile, Arizona showed the greatest improvement with a 45 percent decrease in fraud risk year-over-year.