CoreLogic: Fraud Risk Index Down Sharply in 2Q

CoreLogic, Irvine, Calif., said its National Mortgage Application Fraud Risk Index decreased significantly, from 152 in first quarter to 132 in the second quarter.

Year over year, CoreLogic reported an 11.4 percent decrease, from 149 a year ago. The share of refinance transactions increased to 35.5 percent in Q2, up from 32 percent in Q1. The risk levels within every refinance segment decreased anywhere from 12 to 30 percent. Meanwhile, the risk within each purchase segment was quite similar to prior quarters. As they represent a smaller overall segment of the market, the effect on the index was minimal, the report said.

After a year of stable fraud risk, CoreLogic attributed the second quarter decrease in to amid a recent decline in interest rates, which triggered a volume surge in Q2. “The swell in refinances and the fact that these additional refinances were rate-driven, which tend to be lower-risk, is what impacted the fraud risk score positively,” the report said.

CoreLogic said most of the top 15 highest-risk metro areas showed decreases in risk from the previous quarter. However, the Albany-Schenectady-Troy, N.Y. metro showed a 61 percent increase in fraud risk. This area did not show signs of the refinance surge that was present in most of the country. Purchases in this market accounted for 82 percent of transactions (versus 64.5 percent nationally).