14
OCCUPANCY
FRAUD RISK
RISES IN
Q3, OTHER
SEGMENTS
DECREASE
Overall, mortgage fraud risk in Q3
declined. However, purchase applications
revealed a 6% risk increase since Q2. e one
fraud type segment to increase since last year
is occupancy fraud. is intel comes from the
latest CoreLogic Mortgage Fraud Report.
e CoreLogic Mortgage Application
Fraud Risk Index showed a 26.3% year-
over-year decrease in fraud risk at the end of
the second quarter of 2020. "is marks the
second year of substantial decreases in risk,"
the company reported.
During Q2 2020, an estimated one in 164
mortgage applications contained indications
of fraud, compared with the reported one
in 123 mortgages the same period last year.
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.
"e large drop in fraud risk in the past
year was primarily driven by record-high
refinancing, which is traditionally lower risk
transactions," said Bridget Berg, Principal
of Fraud Solutions Strategy for CoreLogic.
"However, we still see elevated levels of
risk in purchase transactions, and we have
not yet seen the long-term impacts of the
COVID-19 pandemic, so it's imperative risk
managers remain vigilant in searching out
potential fraud."
e researchers pulled the following
highlights:
» Occupancy fraud risk was the only fraud
type segment to experience an increase year
over year, jumping 25.8% between Q2 2019
and Q2 2020.
» New York, Nevada, and Florida were the
top three states with the largest amount of
mortgage application fraud risk. Nevada
moved into the top three for the first time
since 2014, showing a risk increase of 8%
year over year.
» Nevada was also the only state in the
top five that showed increased risk when
compared to 2019.
» States with the greatest year-over-year
risk growth include New Hampshire,
Wyoming, North Dakota, Nevada, and
Rhode Island. Lower-populated states tend
to show greater volatility due to less lending
activity.
Journal
