Stricter underwriting guidelines that are making it more difficult for prospective home buyers to qualify for mortgages are also leading more of them to lie on their loan applications. That is how industry analysts are interpreting statistics indicating that 74 percent of the mortgage fraud cases reported to LexisNexis Risk Solutions last year involved falsified loan applications, up from 61 percent in 2011.

“It is not difficult to recognize the connection between tight credit approval guidelines, industry professionals looking to make a profit, and mortgage application fraud,” the LexisNexis 16th Annual Fraud Report” noted. The statistics also reflected a “notable increase” in credit documentation fraud – where credit reports or credit history references are misrepresented ─found in 17 percent of applications compared with only 5 percent the year before. Appraisal fraud, on the other hand, declined to a 5-year low, found in only 15 percent of loans reported, compared with 26 percent in 2012 and 31 percent in 2011.