The 2009 increase was small, but officials say they believe a lot of scam artists are going high-tech.
"Technology has provided fraudsters with the ability to access information, conduct criminal activities and remain anonymous via the Internet, and manipulate processes that rely on the need for expediency," said the institute's Jennifer Butts.
"Although technology is an enabler of fraud perpetration, for the scammer there must be a system to beat and/or a victim to manipulate," she said.
Scammers operate "ahead of the fraud curve," she said, meaning that agencies with mandates to root them out may not even be aware of the activities.
I've stopped counting the number of people I've written about who have tried to extricate themselves from financial trouble via "help" found on the Internet.
It's enough to say that this is an indicator of how desperate people are in these tough economic times.
Farah Jiminez, executive director of Mount Airy USA, the counseling agency in Northwest Philadelphia, has a client who, while trying to avert foreclosure, paid more than $5,000 to not just one out-of-state scam artist, but two.
The client is being "counseled by us at a cost of $450 - a fee we charge, not to the client, but against a state and federal grant," Jiminez said. "I wish we were getting paid what these scammers earn. We'd be able to add staff and serve a lot more victims."
The government has been stepping in, albeit belatedly, to try to make lenders and everyone else more accountable for their practices.
The most proactive group appears to be investors in mortgage-backed securities, who are requiring full disclosure from lenders on the loans in the packages they are buying, as well as requiring any losses through foreclosures to be, at the least, shared.
In light of the unprecedented level of foreclosures, it should come as no surprise that appraisal fraud was on the increase last year, too.
"The effects are compounded in declining markets," said Darius Bozorgi, president of Veros Software Inc., of Santa Ana, Calif., which tracks such data.
What he means is that states such as Florida and California or those in the Midwest, where values have plummeted, have a higher incidence of appraisal fraud than other areas do.
Butts, of the Mortgage Asset Research Institute, said the most prevalent types of appraisal fraud and misrepresentation for loans originated in 2009 involved incorrect or fabricated comparables, omitted information, and value inflation.
Does this surprise anyone?
"Not at all," said Mayfair real estate broker Christopher J. Artur. "I have seen some high sale prices even in this market, which will lead to even more defaults."
Fraud and misrepresentation in the mortgage industry helped facilitate the economic crisis, and there are "new forms of collusion and opportunistic scamming" today, Butts said.
The solution is "back to basics," she said. "Don't just trust, verify. If information results in uncertainty, trust your instincts and stop. Pay attention."
Inquirer real estate writer Alan J. Heavens is the author of "Remodeling on the Money" (Kaplan Publishing). His home improvement column appears Fridays in Home & Design. "On the House" appears Sundays in The Inquirer. Contact Alan J. Heavens at 215-854-2472 or firstname.lastname@example.org.