Property Fraud On The Rise, CoreLogic Warns

Fraud-related mortgage originations in the U.S. will total about $7.4 billion this year, according to new estimates from CoreLogic. Though nearly a 40% drop from the estimated $12 billion in fraud-tainted originations experienced last year, this year's figures should not be mistaken as a significant reversal in fraudulent behavior.

Rather, CoreLogic attributes the year-over-year decrease primarily to ‘significantly lower’ mortgage origination volume and lenders' improved pre-funding fraud controls

Distressed sales, meanwhile, remain a ‘source of significant risk,’ according to the report. CoreLogic estimates that short sale fraud, for example, will cost lenders upwards of $375 million in unrealized recoveries this year.
The study, which analyzed 10.5 million loan applications from the first quarter of 2005 through the first quarter of this year, revealed a huge jump in property fraud (a 262% increase over last year) and a decline in identity fraud (down 45%).

CoreLogic also reports that its fraud index has remained relatively flat for the last five consecutive quarters. The index is down more than 28% since its peak in the third quarter of 2007.


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