Mortgage fraud risk has hit its highest level in seven years, according to new data from CoreLogic. The report shows a 12.4% year-over-year increase in fraud risk at the end of the second quarter. Mortgage fraud risk has increased continually for the last seven quarters.
The analysis found that during the second quarter of 2018, an estimated one in 109 applications, or 0.92% of all mortgage applications, contained indications of fraud, compared with the reported one in 122, or 0.82% in the second quarter of 2017.
The CoreLogic Mortgage Fraud Report analyzes the collective level of loan application fraud risk experienced in the mortgage industry. The report includes data for six fraud type indicators that complement the national index: identity, income, occupancy, property, transaction and undisclosed real estate debt.
“Because home prices are rising, and demand is strong, most mortgage fraud in this type of market is motivated by bona fide borrowers trying to qualify for a mortgage,” said Bridget Berg, principal of Fraud Solutions Strategy for CoreLogic. “Undisclosed real estate liabilities, credit repair, questionable down payment sources and income falsification are the most likely misrepresentations.”