Mortgage fraud risks decrease in Q2

Nationally, five of the six mortgage fraud types increased risks over the quarter. The most common types of fraud were income and property fraud, which registered the largest year-over-year increases in the second quarter, up by 27.3% and 22.6%, respectively. The outlier was undisclosed real estate debt, which declined by 12%.

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According to CoreLogic, this trend is not surprising, considering that purchase loans – more susceptible to fraudulent activity – now account for more mortgage transactions than refinances.

“Income fraud risk remains a top concern for lenders, but there is a rising focus on property value risk as home prices slow their growth and homes are taking longer to sell,” said Bridget Berg, principal of industry and fraud solutions. “CoreLogic data backs up those concerns, as our most predictive flags for both income and property frauds increased in the last year by more than 20%.”