Report Shows An 8.9 Percent Decrease In Mortgage Fraud Risk

Greater scrutiny has had a positive impact on mortgage fraud

By Jeff Sorg, OnlineEd Blog

fraud(Ocboter 20, 2015) – As of the end of the second quarter of 2015, the CoreLogic® Mortgage Fraud Report shows an 8.9 percent year-over-year decrease in fraud risk, as measured by the Mortgage Application Fraud Risk Index.

Susan Allen, senior vice president of Mortgage Analytics at CoreLogic says, “New regulations, like Qualified Mortgage (QM) and Ability to Repay (ATR), as well as stricter credit overlays, have resulted in greater scrutiny of mortgage applications. Greater scrutiny, in turn, has had a positive impact on the rate of fraudulent applications. In the markets where fraud remains strong, there are also significant inventories of distressed properties. Typically, this leads to large value discrepancies with nearby properties, which increases the risk of incorrect valuation, fraud-for-profit schemes, and occupancy fraud on properties recently converted to rentals.”

Louisiana is the state with the highest year-over-year growth in mortgage application fraud risk at 17 percent; Kansas had the largest decline at 35.2 percent. Jumbo mortgages continue to have the highest fraud risk, followed by low-down payment mortgages.

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