Mortgage fraud risk has hit its highest level since the recession, according to new data from CoreLogic.
Mortgage fraud risk has increased continually for the last seven quarters, according to CoreLogic. The analytics firm’s latest mortgage fraud report showed a 12.4% year-over-year spike in fraud risk at the end of the second quarter. An estimated one in 109 mortgage applications in the second quarter contained indications of fraud, compared to one out of 122 in the second quarter of 2017.
“This year’s trend continues to show an increase in mortgage fraud risk year over year,” said Bridget Berg, principal of fraud solutions strategy for CoreLogic. “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.”
New York, New Jersey and Florida were the top three states for mortgage-application fraud risk, according to CoreLogic. All of the top 10 riskiest states saw year-over-year increases in fraud risk.
Conforming purchase loans saw the greatest risk increase among loan types.