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10 MORTGAGES FACING INCREASED RISK OF FRAUD CoreLogic Senior Director of Fraud Solutions Strategy Bridget Berg took a look at the overall fraud risk outlook for 2017. Based on CoreLogic's information, fraud risk increased by about 17 percent year-over-year and is now at its highest level since 2010. "Keep in mind, however, that in historical terms, fraud, overall, is still relatively low, given the tighter underwriting since the mortgage crisis, and the amount of rate and term refis over the past few years," said Berg. However, in 2017, despite the decrease in application volumes, the total number of applications with fraud is higher than last year; in fact, CoreLogic discovered 13,404 applications with indications of fraud in Q2 2017 alone. Berg said there are two main drivers of fraud risk increases this past year, including a continued increase in purchase transaction share from 55 percent of applications to 66 percent over the last year. e other factor is originations coming through wholesale channels, as these loans have a "historically exhibited a higher risk of fraud." According to Berg, there are three types of mortgage fraud on the rise for 2017. First, occupancy fraud risk has increased by 7 percent, which includes traditional occupancy risk, and reverses occupancy risk. Second, transaction fraud risk covering straw buyers and falsified down payments has increased about 4 percent. e third type of risk is income fraud risk, which increased 3.5 percent, with "most of the increase happening in the first half of this year." Regionally, the top three states that are at risk for mortgage fraud are New York, New Jersey, and Florida. However, the states showing the greatest growth rate in fraud are lower-risk states in the middle of the country, including Iowa, Indiana, and Missouri. Berg notes that for the future, CoreLogic will be monitoring cash-out refinances and home equity loans, as rising home prices and homeowner equity are forecasted to become prevalent. e fraud risk on these products is higher than it is for rate and term refinances, so Berg said this is another area to watch over time. Aspen iProperty® Aspen iProperty® is a robust, secure, customizable, enterprise-wide property management solution for the fi nancial services industry. It is widely used by banks, servicers, investors, vendors, and others that inspect, preserve, manage, and sell properties; analyze inventory; manage vendors and compliance; and train internal and external personnel. It creates an independent property management system for each stakeholder, connects networks at all levels of the supply chain, and optimizes the assignment of work and service delivery, through established process workfl ows. It meets the demands of an increasingly regulated environment while managing specifi c processes including, but not limited to: routine inspections, preservation and maintenance, FHA conveyance, compliance, capital repairs, REO, short sale, and hazard claims. Aspen Grove Solutions | 706 W. Patrick St., Frederick, MD 21701 | O ce: 240.345.3430 | Email: sales@aspengrovesolutions.com | www.aspengrovesolutions.com 1. Borrower Default 45+ Days Delinquent 2. Collection/Loss Mitigation E orts 3. Inspection/Prop Pres/Repairs 4. Bankruptcy Filing/Relief of Stay 5. Foreclosure Sale 6. REO 1. Mortgage Origination 2. Loan Set-Up, Payments, Escrow, Tax 3. Payo 1. Mortgage Origination 2. Loan Set-Up, Payments, Escrow, Ta 3. Pa 1. Borrower Default 45+ Days Delinquent 2. Collection/Loss Mi orts 3. Inspection/Prop Pres/Repairs 4. Bankruptcy Filing/Relief of Stay 5. Foreclosure Sale SERVICER PERFORMING LOAN Servicer's System of Record NON-PERFORMING LOAN Aspen iProperty® INTEGRATION THROUGH API SERVICER The percentage of current of past homeowners surveyed responding that they could have afforded a home without their families' help. Source: Fannie Mae 2017 National Housing Survey STAT INSIGHT 73%

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