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Mortgage Fraud On the Rise Amide Rise in Purchase Loan Share
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ccording to a recently released CoreLogic Report, Mortgage Fraud Report, there was a 37.2 percent year-over-year increase in fraud risk at the end of the second quarter of 2021. The 37.2 percent increase appears to be significant, measured from the lowest index point in Q2 2020, the lowest in Core Logic’s 11-year history. When the pandemic hit, and the refinancing boom ensued in Q2 2020, the index had dropped to 96 thanks to the increase of lowrisk rate/term refinances. The index seen is very, however, very similar to the levels seen in Q2 2019—which was 131.
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In the second quarter of 2021, about 1 in 120 mortgage applications had fraudulent activity, 0.83 percent of all mortgage applications. An increase from last year’s second quarter in which the estimate of applications with fraudulent activities was 0.64 percent, about 1 in 164 applications. Like the previous year, investment properties had the highest risk applications for both purchases and refinance populations. To narrow it down further, investment purchase applications showed the highest risk, with 1 in every 23 applications having some fraudulent activities. As for purchase applications, their fraud risk jumped by 40 percent, while the risk for refinance applications THE POWER IS NOW MAGAZINE | DECEMBER 2021
