Year-Over-Year Mortgage Fraud Risk Decreases More Than 25 Percent


CoreLogic’s latest Mortgage Fraud Report shows a 26.3% year-over-year decrease in fraud risk at the end of the second quarter of 2020 – the second year of substantial decreases in risk.

Throughout the second quarter of 2020, an estimated one in 164 mortgage applications, or 0.6% of all applications, contained indications of fraud, compared with the reported one in 123 mortgages, or 0.8% in the second quarter of 2019.

Continued low mortgage rates and a record volume of refinances pushed the overall fraud risk down. However, risk in the purchase segment increased 6%, with investment properties driving the highest risk in both purchase and refinance populations.

“The large drop in fraud risk in the past year was primarily driven by record-high refinancing, which is traditionally lower risk transactions,” says Bridget Berg, principal of fraud solutions strategy for CoreLogic. “However, we still see elevated levels of risk in purchase transactions, and we have not yet seen the long-term impacts of the COVID-19 pandemic. So it’s imperative risk managers remain vigilant in searching out potential fraud.”

Occupancy fraud risk was the only fraud type segment to experience an increase year over year, jumping 25.8% between Q2 2019 and Q2 2020.

New York, Nevada and Florida were the top three states with the largest amount of mortgage application fraud risk.

Nevada moved into the top three for the first time since 2014, showing a risk increase of 8% year-over-year. Nevada was also the only state in the top five that showed increased risk when compared to 2019.

States with the greatest year-over-year risk growth include New Hampshire, Wyoming, North Dakota, Nevada and Rhode Island. Lower-populated states tend to show greater volatility due to less lending activity, CoreLogic says.

For more details from the CoreLogic Mortgage Fraud Report, click here.

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Thomas Bohlmann
Thomas Bohlmann
3 years ago

One to five years latter, are the original borrowers making their loan payments or have small local investors taken over the loans and assumed the payments?