CoreLogic: Mortgage Fraud Increases After Earlier Dip

CoreLogic, Irvine, Calif., reported mortgage fraud is increasing again after a brief dip last year.

The CoreLogic Quarterly Mortgage Fraud Report analyzes which metros have the highest mortgage fraud risk and offers insights based on mortgage applications processed by the firm’s LoanSafe Fraud Manager. The report said an “overheated” housing market and the transition to a more robust purchase market could partially explain the mortgage fraud increase.

“Purchase loans are inherently riskier than refinances, and there was a significant drop in refinances in the second quarter, compounded with record purchase volumes,” said Bridget Berg, Principal of Industry Solutions and Property Intelligence with CoreLogic.

The report ranked the riskiest metros for mortgage fraud. Florida cities areas took up six of the top 15 spots. CoreLogic said 14 of the 15 riskiest metros saw fraud risk increase over the past quarter.

“There are several different types of fraud that can impact a mortgage,” Berg said. “From occupancy fraud, employment and income fraud to property fraud, external factors can drive what types are fraud are more prevalent than others.” She noted the fraud report highlights industry trends that are driving specific types of fraud so mortgage bankers can know what to watch out for.