Though the news often seems dominated by stories of mortgage scams, a new report shows fraud risk on the decline
Fraud risk among U.S. mortgage applications was down in the second quarter, according to a leading analytics firm.
According to CoreLogic’s Mortgage Fraud Report, released Friday, mortgage application fraud risk was dropped 5.6% in Q2. Fraudulent residential mortgage applications totaled about $5.3bn in the second quarter, up a bit from Q1’s $5.1bn, but down from $5.5bn in Q2 of 2012. Fraudulent loan applications totaled about $10.5bn for the first half of 2013.
“Since the beginning of 2012, mortgage application fraud risk has totaled more than $30 billion nationally,” said Dr. Mark Fleming, chief economist for CoreLogic. “While the propensity toward application fraud risk has declined based on our index, as the housing market recovers, the volume of mortgage applications is rising and increasing the total amount of fraudulent mortgage loan application dollars.”
About 19,700 mortgage applications – around 0.8% of total apps – were identified as having a high fraud risk in the second quarter, down from about 20,900 applications year over year. Fraud volume remained relatively flat between the first and second quarters, according to CoreLogic.
CoreLogic’s report tracked fraud in six specific areas: income, employment, occupancy, identity, property and undisclosed debt. Misrepresentation of income showed the highest year-over-year increase at 13.3%. Income fraud risk increased 7.5% over Q1. Property fraud risk – deliberately over- or under-valuing a home – showed the greatest decrease, dropping 20.8% year over year and 7.1% from the first quarter.
Ohio was number one in increased mortgage fraud risk, showing a year-over-year increase of 30.1%. California had the highest dollar value in fraud risk at $864 million.
