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local edition ANALYTICS for mortgage fraud and misrepresentation (with a reading of 120 for investigations and 213 for 2012 originations), potential collusion (with a reading of 233), and properties in default (3.06 percent). Despite a decline in fraud levels, some states are still enduring fraudrelated claims. NEW JERSEY // While Florida, Nevada, and California are some of the most commonly cited examples of states hit hard by the housing implosion, an analysis of fraud data submitted to LexisNexis' Mortgage Industry Data Exchange (MIDEX) shows New Jersey might have taken the worst impact. In its 15th Annual Mortgage Fraud Report, LexisNexis Risk Solutions put a spotlight on three economic indicators: mortgage fraud and misrepresentation involving industry professionals, potential collusion activity, and volume of properties in default. Together, the three indicators show the full extent of the damage caused over the last few years by the housing market's crash, the company says. Looking at mortgage loan fraud levels, researchers at Price Growth Slows Pace has dropped as some markets top pre-crash peaks. FLORIDA // Home price increases slowed on a monthly The M Report | 55 se c on da r y m a r k e t before 2012 were removed, the Sunshine State's index fell to 169. For all of its improvement, however, Florida's economic prognosis still looks shaky. Despite the drop in fraud levels, the state still ranked among the top 10 for fraudulent reports in 2012, and it also placed highest for percentage of properties in default with 5.42 percent. "This year's study suggests that the more shared problematic economic indicators a state has, the greater its financial challenges will be in the coming years," said Tom Suffer No More basis in July as more markets approach their pre-crash peaks, Lender Processing Services (LPS) reported in its monthly Home Price Index (HPI) report. Nationally, LPS' index was up to $231,000 in July, a 0.6 percent gain over June. Compared to last year, July's index was up 8.7 percent. Among other things, July's annual growth could be attributed to the sharp increase in non-distressed sales, which rose about 45 percent over last summer as distressed sales fell off, LPS reported. As of the end of the month, the average national price was 14.7 percent off from its peak in June 2006. There was a bit more geographical spread in the list of states reporting the most upward trajectory in July. Minnesota and Utah took the top spot, with both seeing 1.1 percent monthly growth. Florida and Nevada were next at an even 1 percent, while Georgia tied with a handful of states at 0.9 percent. On the bottom 10, Pennsylvania had the poorest performance month-over-month, posting no change. Vermont was next with 0.1 percent growth, followed by Connecticut, Nebraska, and Arkansas, which were just a few of the states posting 0.2 percent price gains. At the local level, California and Florida markets continued to occupy half of the spots for the areas with the largest improvements. Orlando, Florida, was No. 1 with 1.6 percent, followed by Stockton and Modesto, California (1.4 percent and 1.3 percent, respectively). Minneapolis, Minnesota, and Salt Lake City, Utah, rounded out the top five (each with 1.2 percent growth). Meanwhile, several of the largest metros around the country continue to outperform their prerecession highs. Those markets include Texas' largest cities— Austin, Dallas, Houston, and San Antonio—as well as Denver, Colorado. a na ly t ic s Brown, SVP of financial services at LexisNexis. "With Consumer Financial Protection Bureau (CFPB) regulations going into effect in January 2014, and demanding new rules for quality loans, it will be interesting to see what impact this has on overall mortgage defaults." Based on Brown's suggestion, New Jersey is looking at the most trouble ahead. The Garden State ranked on all three top 10 lists s e r v ic i ng LexisNexis determined that most states have seen fraud fall to normal levels since 2008, though the fallout from prior years continues to build. For example, Florida ranked No. 1 for fraud activity under investigation in 2012 with an index value of 805—more than eight times the expected level of fraud given the state's origination activity. However, when originations Or ig i nat ion Offering his perspective on the San Francisco market, Redfin agent Nicolas Meyer said, "Once mortgage rates started to pick up, some buyers put their searches on hold, but at the same time, the already scarce inventory in Silicon Valley fell even further last month." "The number of offers per home has declined, but the buyers who remain are still bidding up home prices well above asking," he said. While rising rates may be slowing some activity, Redfin said the lower rates recorded in September "could spur a slight boost in bidding wars in October." In fact, after the Federal Reserve announced its decision to continue its stimulus program, home sellers "were so bombarded with offers that they began adding offer review deadlines—a tactic that was the norm this spring and early summer but had begun to phase out," said KC Brants, a Redfin agent.