Core Logic Says Mortgage Application Fraud Has Skyrocketed By 12.4% In the Past Year 

mortgage application fraudCore Logic has issued their new Mortgage Fraud Report and it’s not looking good. The report states there has been a 12.4% increase in mortgage application fraud since the second quarter of 2017. This is the highest increase in seven years according to the National Mortgage News.

The report is based on residential mortgage applications processed by CoreLogic LoanSafe Fraud Manager. The data analyzes six indicators on a loan application. These include:

  1. Identity
  2. Income
  3. Occupancy
  4. Property
  5. Transaction
  6. Undisclosed real estate debt

CoreLogic’s Principal of Fraud Solutions Strategy Bridget Berg said:

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. Undisclosed real estate liabilities, credit repair, questionable down payment sources and income falsification are the most likely misrepresentations.

Fannie Mae also issued a warning to lenders. The GSE warned of more than 30 employers that appeared on mortgage applications that appeared to be fake.

The report also indicated an estimated 0.92% of all mortgage application contained fraud in the 2nd quarter of 2018. This is an increase from 0.82% in the second quarter of 2017.

The report also named the top 10 states showed an increase in risk from the previous years. In particular, New York, New Jersey, and Florida continue to be the top three states for mortgage application fraud.

The states with the greatest year-over-year risk growth included New Mexico, Mississippi, Illinois, Oklahoma and Texas. Notably, New Mexico, Illinois and Oklahoma now have risk levels greater than the National Index, growing from 133 to 149 year-over-year.

The Tampa Bay area ranked in the top 25 metro areas. The Tampa Bay area ranked eighth in the risk of application fraud.

Also, read:

Is Lying On Mortgage Loan Applications Worth 20 Years In Prison?

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