Mortgage fraud on the rise — report

by Ryan Smith23 Sep 2016

Mortgage fraud was up year-over-year in the second quarter, with Florida remaining the state with the highest risk of fraud, according to new data from CoreLogic.

More than 12,000 mortgage applications were estimated to have indications of fraud in the second quarter, according to CoreLogic’s 2016 Mortgage Fraud Report. The company’s mortgage application fraud risk index was up 3.9% year over year from the second quarter of 2015, continuing a general upward trend in fraud since 2010.

“This is consistent with the loosening of credit policy after historically tight credit policies post-crisis,” CoreLogic stated in its report.

Fraud itself — as opposed to merely a risk of fraud — was also up slightly. In the second quarter, an estimated 0.7% of all mortgage applications contained fraud, an increase from Q2 of 2015’s 0.67%.

CoreLogic cited a number of factors contributing to the increase in fraud risk, including an increased share of purchase loans, the availability of higher loan-to-value mortgages and the loosening of GSE credit policies.

“Mortgage application fraud risk will likely rise over the next few years if current trends of higher LTV purchases with increased credit availability continue,” said Bridget Berg, senior director of fraud solutions strategy at CoreLogic.

Florida had the highest application fraud risk, followed by New York, New Jersey, Hawaii and Washington, D.C. While Florida had the highest fraud risk, it also showed the greatest decrease in fraud risk year-over-year, with risk falling by 19%. Fraud risk in New York and New Jersey, meanwhile, increased by 12% and 13%, respectively.


  • by Anonymous | 9/23/2016 11:42:22 AM

    I cry foul. There is no possible way that fraud is occuring in greater numbers now, post-meltdown. Our files are all so heavily scrutinized now that there is no possible way that someone could even think they could get away with fraud today. I firmly believe this is a ploy being used by 3rd party compliance providers to somehow show their value in a market that should be showing declining demand. "Look at this special report. See? Fraud is rising so you better sign up with us. Only we can protect you..." BS, BS, BS...

  • by | 9/23/2016 11:52:28 AM

    I agree. Virtually every mortgage provided under current rules and regulations are the highest quality mortgages in the history of lending. I call BS as well.

  • by | 9/23/2016 12:08:25 PM

    I agree credit has not loosened at alll and programs are limited.


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