Residential News » New York City Edition | By Michael Gerrity | September 14, 2022 7:45 AM ET
According to CoreLogic's latest Mortgage Fraud Report, there was a 7.5% year-over-year decrease in fraud risk at the end of the second quarter of 2022, as measured by the CoreLogic Mortgage Application Fraud Risk Index. The decline in mid-2022 follows a large increase seen in the same period in 2021 and is partially due to the recalibration of CoreLogic's scoring model in the first quarter of 2022. Since that update, higher risks were recorded during months in the second quarter, particularly for certain types of mortgage fraud.
In the second quarter of 2022, an estimated 0.76% of all mortgage applications contained fraud, about 1 in 131 applications. By comparison, in the second quarter of 2021, that estimate was 0.83%, or about 1 in 120 applications. Risks of income and property fraud posted the largest year-over-year increases in the second quarter, a respective 27.3% and 22.6%.
This trend is perhaps not surprising, considering that purchase loans now account for more mortgage transactions than refinances, and that the former are more susceptible to fraudulent activity.
"Income fraud risk remains a top concern for lenders, but there is a rising focus on property value risk as home prices slow their growth and homes are taking longer to sell. CoreLogic data backs up those concerns, as our most predictive flags for both income and property frauds increased in the last year more than 20%," said Bridget Berg, principal, Industry & Fraud Solutions at CoreLogic.
U.S. Mortgage Fraud Report Highlights Include: