Hurricanes and the related flooding have increased the potential for significant misrepresentation of collateral condition in mortgage applications
Hurricanes and the related flooding have increased the potential for significant misrepresentation of collateral condition in mortgage applications.
The First American Loan Application Defect Index, there was no rise in the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications in August 2017 as compared with the previous month.
However, the recent natural disasters could result in a higher frequency of defects ahead according to chief economist Mark Fleming.
“It’s a positive sign that loan application risk has remained stable for two consecutive months, but given the recent high-profile data breaches that exposed the personal credit information of many U.S. consumers, the risk of identity-based fraud and misrepresentation is certainly elevated,” he said.
Fleming’s view is backed up by previous data.
“In the aftermath of Hurricane Sandy, which impacted the New York City area in late October 2012, mortgage fraud, misrepresentation and defect risk based on the Defect Index increased 16.5% over four months in the New York metropolitan area,” Fleming said.
The five states with the greatest year-over-year increase in defect frequency are: South Dakota (+56.1%), Wyoming (+50.8%), North Dakota (+50.7%), North Carolina (+39.4%), and New Mexico (+39.1%).
The First American Loan Application Defect Index, there was no rise in the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications in August 2017 as compared with the previous month.
However, the recent natural disasters could result in a higher frequency of defects ahead according to chief economist Mark Fleming.
“It’s a positive sign that loan application risk has remained stable for two consecutive months, but given the recent high-profile data breaches that exposed the personal credit information of many U.S. consumers, the risk of identity-based fraud and misrepresentation is certainly elevated,” he said.
Fleming’s view is backed up by previous data.
“In the aftermath of Hurricane Sandy, which impacted the New York City area in late October 2012, mortgage fraud, misrepresentation and defect risk based on the Defect Index increased 16.5% over four months in the New York metropolitan area,” Fleming said.
The five states with the greatest year-over-year increase in defect frequency are: South Dakota (+56.1%), Wyoming (+50.8%), North Dakota (+50.7%), North Carolina (+39.4%), and New Mexico (+39.1%).
