CoreLogic Reports 37.2% National Year-Over-Year Increase in Mortgage Fraud Risk
According to CoreLogic's newly released Mortgage Fraud Report, there was a 37.2% year-over-year increase in fraud risk at the end of the second quarter of 2021, as measured by the CoreLogic Mortgage Application Fraud Risk Index. The significant increase for mid-2021 follows a large drop seen in 2020 - a decrease driven mainly by the surge in traditionally low-risk refinances during the pandemic. The current risk level is similar to mid-2019.
During the second quarter of 2021, an estimated 0.83% of all mortgage applications contained fraud, about 1 in 120 applications. By comparison, in the second quarter of 2020, the estimate was 0.61% or about 1 in 164 applications. Continued low mortgage rates and a record volume of refinances pushed the overall fraud risk down. However, risk in the purchase segment increased 6%, with investment properties driving the highest risk in both purchase and refinance populations.
"Refinance opportunities that surged lending volumes during the pandemic may be winding down. The outlook is for fewer low-risk refinances compared to purchases and cash-out refinances, which translates to a higher-risk environment for fraud," said Ann Regan, executive, product management at CoreLogic.
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