South Florida's mortgage fraud risk index spiked 10 percent during the first part of the year, shooting the region to second place nationally for potential housing scams.

It ranked 20th during the same time last year.

The region, comprising Palm Beach, Broward and Miami-Dade counties, was the only high-risk area to see an overall increase, according to a report released this month by fraud analysis company Interthinx.

Top-ranked Modesto, Calif., experienced a 23 percent decrease in the first quarter compared with the same time in 2010.

The quarterly Mortgage Fraud Risk Report tracks indicators of fraud on mortgage applications run through an Interthinx detection program available to lenders.

Nationwide, the index posted four consecutive quarters of decline until it jumped 25 percent during the first quarter of 2011.

"Risk is becoming more prevalent across the board," said Kevin Coop, president of Interthinx, which recommends that lenders continue strict screening processes before making home loans.

And despite an assumption that fraud occurs only during a market boom, analysts said plenty of scams happen on the downside.

"Fraud ebbs and flows," said Ann Fulmer, vice president of business relations for Interthinx. "Whatever schemes are out there are always mutating to take advantage of the local economy and the weaknesses in lender processes."

While the report ranks fraud on an overall basis, it also measures four types of scams: property valuation fraud, identity theft, occupancy fraud and phony income reports.

South Florida ranked in the top five for all types of fraud except income-based scams.

The area ranked first in occupancy fraud, which is perpetrated mostly by investors or second-home buyers who falsely claim they are going to live in the house full time as a way to reduce down payments and interest rates.

The region ranked fourth for identity fraud and fifth in property valuation fraud. Identity fraud typically involves schemes to hide the real buyer of a home to get a better credit profile and meet lender guidelines.

South Florida was the only top-five region to see an increase - 2 percent - in valuation fraud, which includes manipulating property values to create a profit margin. Flipping, in which an investor buys a property cheap or at market value and sells at an artificially inflated price, was part of what led to the real estate crash.

Although flipping decreased after 2008, Fulmer said it is on the rise again.

"Real estate is local, everything responds to local markets, and there are places like South Florida that are vulnerable to certain risk categories," Fulmer said.

One reason for that susceptibility is the variety of South Florida buyers, including investors, retirees, second-home buyers and foreigners.

"People not familiar with the area rely on professionals for help, but con artists trade on the appearance of being upstanding individuals," Fulmer said.