CoreLogic: Mortgage Fraud Risk Increased 3.9% In Q2

Posted by Patrick Barnard on September 28, 2016 No Comments
Categories : Residential Mortgage

The risk of fraud in applications for mortgages increased in the second quarter – and the trend will likely continue as credit loosens and purchases increase, CoreLogic says in its latest Mortgage Fraud Risk report.

The report measures six common types of fraud: identity, income, occupancy, property, transaction and undisclosed real estate debt. It does not attempt to determine whether the errors were intentional or accidental.

As of the end of the second quarter, the risk of mortgage fraud had increased about 3.9%, relative to the first quarter, the report shows. CoreLogic analyzed an estimated 12,718 mortgage applications – or about 0.70% of all applications submitted during the quarter.

“Mortgage application fraud risk will likely rise over the next few years if current trends of higher loan-to-value purchases and increased credit availability continue,” said Bridget Berg, senior director of fraud solutions strategy for CoreLogic, in a statement. “Because post-fund quality control findings are biased to specific types of fraud that are easy to detect shortly after closing, lenders should not rely only on those results to measure fraud risk.”

Florida continues to be the riskiest state for mortgage application fraud, the report shows.

However, Florida also had the largest year-over-year decline in application fraud risk, at 19%.

States with the greatest year-over-year growth in risk included Kansas, Maine, Wisconsin, Nebraska and Arkansas.

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