Overall risk of mortgage fraud continued on an upward climb after a one-quarter pause, according to the Mortgage Fraud Risk Report from Interthinx. The company’s fraud analysis of the second quarter indicated a 7 percent rise in fraud risk — a 149 on the scale.

Interthinx said the change was primarily driven by the move of 91 metropolitan statistical areas (MSAs) into the “very high risk” category. That includes Chattanooga, Tenn., which is now the riskiest MSA in the country after a 30 percent quarter-over-quarter increase in its index value. In addition, Georgia has joined the top five states for overall mortgage fraud risk for the first time since the report started in 2009.

“This report shows that overall fraud risk is rising and is migrating geographically, as evidenced by Georgia and the rise in risk in the southeastern United States generally,” stated Kevin Coop, president of Interthinx. “An 8 percent increase in Atlanta along with a 20 percent increase in Augusta, a 10 percent increase in Columbus, a 16 percent increase in Gainesville, and a huge gain of 39 percent in the Chattanooga, Tenn., metro -- which spans both Tennessee and Georgia -- combined to push Georgia into the top five states for the first time since we began this report.”

Other notable findings in the most recent report include:

• The New York City MSA continued its rise in the rankings, climbing to sixth place in the current quarter from 17th place just six months ago.
• In addition, five New York City area ZIP codes — including three in Brooklyn — are now among the top 10 riskiest ZIPs in the nation.
• Nevada and Arizona remain the two riskiest states despite experiencing a small decrease in overall fraud risk over last quarter. Nevada’s index value is currently 208, and Arizona’s is at 206.
• The MSAs for Las Vegas-Paradise, Nev., and Phoenix-Mesa-Scottsdale, Ariz., are notably absent from the list for the first time since Q4 2009.
• Florida remained the third riskiest state, with a Fraud Risk Index value of 199. Contributing to Florida’s ranking is its dominance of the overall and type-specific top 10 lists.
• For the first time since the inception of this report in second-quarter 2009, California is not in the top five and is replaced by Georgia.
• Despite California’s overall decline in fraud risk, its metros are well represented in all the top 10 lists, taking nine of the top 10 spots for Employment/Income Fraud Risk.  

The full report is available here.