Dallas’ 75201 ZIP code includes the snazzy Arts District, some of the city’s tallest skyscrapers and a chunk of fashionable Uptown.
The area is also ground zero for North Texas mortgage fraud.
From 2005 to 2009, more than 13 percent of the home mortgages made in 75201 turned out to be fraudulent, according to a study done for The Dallas Morning News by researchers at CoreLogic.
In most cases, the fraud came when folks buying pricey condos lied about their income or identity. Or investors claimed they were going to live in the units when they really had no such plans.
Either way, it was illegal. And surprisingly common.
Almost a quarter of the homes foreclosed across the country in recent years show evidence of loan fraud. Other common tactics have included lying about employment, hiding debts or faking assets.
Besides central Dallas, the other hot spots for home loan shenanigans that CoreLogic found include the Fair Park area (75210), sections of South Dallas (75203 and 75216), the Collin County suburb of Prosper (75078) and far southeast Dallas (75253).
It shouldn’t be surprising that a number of buyers of high-rise condos in Uptown and downtown fibbed about how much money they earned.
And a significant number of the luxury condo acquisitions were made by investors who never moved into the units.
For all the D-FW area, CoreLogic estimates that less than a quarter of a percent of the home loans made during the five-year period were fraudulent. That works out to about 22 cents for every $100 in loans.
Compare that with the national average of 0.55 percent, or 55 cents out of $100, and the D-FW area looks pretty good.
And it’s chicken feed compared with Orlando, Fla., Miami, Atlanta and Detroit, where the rate of mortgage shams was more than three times the national average.
No Texas cities made CoreLogic’s list of the top 20 U.S. locations for home loan fraud.
Florida, South Carolina, North Carolina, California and Georgia were the highest-ranking states for fraudulent mortgages.
To come up with its nationwide report, CoreLogic analyzed representative data from 80 million loan applications made from 2005 through 2009.
Researchers for the California-based housing data firm say mortgage fraud peaked in 2007.
At that time, almost 27 percent of the loans made in Dallas’ 75201 ZIP code were crooked. That was also the peak of the local home market.
“Our 2010 fraud index indicates that mortgage fraud risk is on the decline,” said CoreLogic senior vice president Tim Grace. “But with an estimated $14 billion in fraud losses experienced in 2009 alone, fraud is still a major issue for the mortgage industry.
“While the industry has done good work, there is evidence that fraud patterns are changing and becoming increasingly better hidden.”
But those shady home loans are hard to hide when they eventually wind up on the courthouse steps at foreclosure auction.
| Mortgage fraud hotspots | ||
| Ranked by the percentage of home loans with fraud, based on all mortgages made from 2005 to 2009: | ||
| ZIP code | City Fraudulent loans | |
| 75201 | Dallas | 13.04% |
| 75210 | Dallas | 3.08% |
| 75203 | Dallas | 1.32% |
| 75078 | Prosper | 1.18% |
| 75216 | Dallas | 0.99% |
| 75253 | Dallas | 0.97% |
| 76205 | Denton | 0.85% |
| 75224 | Dallas | 0.78% |
| 75244 | Dallas | 0.75% |
| 76259 | Ponder | 0.70% |
| D-FW area | 0.22% | |
| U.S. | 0.55% | |
| SOURCE: CoreLogic |
Source: Dallas Morning News