St Casimirs Mortgage Minute

CoreLogic: Mortgage Application Fraud Risk Rising


The risk of mortgage application fraud rose 3.2 percent from the second quarter of 2013 to the second quarter of 2014, according to a new report from CoreLogic. However, the fraud risk index is down from the previous three quarters. The index component of fraud when a property’s value is misrepresented rose 3.3 percent year on year.

Other components of risk fell, including risk associated with misrepresentations about occupancy (which fell 1.5 percent), employment application fraud (2 percent) and income application fraud (4 percent). The risk of identity application fraud fell 18.5 percent, CoreLogic said, and the risk that applicants will have undisclosed debts fell by 22.7 percent, which the firm attributed to lender efforts to comply with the Ability to Repay rule.

Fraud risks associated with jumbo and conforming mortgages have fallen to their lowest points since the survey began in 2010, while the risk of fraud from mortgages with a loan-to-value ratio of more than 80 percent has risen to its highest point since 2010. Mortgage fraud risk was highest in Florida, Nevada, New York, Rhode Island and Hawaii, CoreLogic found. Florida and Nevada retain a large stock of foreclosed and vacant properties, which elevates the risk of property valuation fraud.

--ABA Daily Newsbytes