Mortgage Fraud Risk Plunges

The risk of mortgage application fraud fell in the second quarter of 2019 thanks to a decrease in interest rates. According to CoreLogic’s National Mortgage Application Fraud Risk Index, fraud risks on mortgage applications decreased by 11.4% year over year last quarter. At the same time, shares of refinance transitions increased from 31% in Q1 to 35.5% in Q2.

The risk levels from refinance segments decreased anywhere from 12% to 30%, according to CoreLogic. Because these rate-driven refinances increased, it impacted fraud index scores positively. The risk for the purchase segment remained the same as in Q1, according to the report.

Out of the 10 metros most likely to have the greatest number of mortgage application fraud reports, there were only three that saw a spike in reports last quarter. The remaining seven saw reports decline.

The Albany-Schenectady-Troy, New York, metro had the biggest increase in fraud reports, up 61% in Q2. McAllen-Edinburg-Mission, Texas, also had a large uptick in fraud reports, with 35% in Q2.

Here are the top 10 metros at the highest risk of mortgage application fraud in Q2:

  1. Miami-Fort Lauderdale-West Palm Beach, Florida
  2. New York-Newark-Jersey City, N.Y.-N.J., Pennsylvania
  3. McAllen-Edinburg-Mission, Texas
  4. Los Angeles-Long Beach-Anaheim, California
  5. Deltona-Daytona Beach-Ormond Beach, Florida
  6. Tampa-St. Petersburg-Clearwater, Florida
  7. Albany-Schenectady-Troy, New York
  8. Tulsa, Oklahoma
  9. Orlando-Kissimmee-Sanford, Florida
  10. San Diego-Carlsbad, California
Source:  CoreLogic/Housing Wire/National Mortgage News