Home sales are weak, but mortgage fraud is on the rise – HousingWire
New data shows that cases among mortgage applicants are on the rise – a trend that is attracting attention as demand from borrowers remains.
The In the second quarter of 2024, it increased by 8.3% year-on-year. This includes an increase of 1.1% compared to the previous quarter. The real estate data analysis firm noted that the index has “increased slightly over the past year, which is to be expected given minimal changes in the factors that typically drive risk shifts in the mortgage market.”
In the second quarter of 2024, one in 123 (0.81%) of all mortgage applications involved fraud. Purchase loans (0.9%) have a higher level of risk than refinancing (0.58%).
CoreLogic found that the lowest risk programs by loan type were from this company (VA), named in accordance with previous years.
When comparing transaction types, multi-story residential buildings with two to four apartments were considered riskier than single-family properties. One in 27, or 3.5%, of multi-story housing applications were fraudulent. The risk of fraud on these types of purchases increased by 5% compared to the second quarter of 2023.
CoreLogic further noted that of the six types of fraud it measured, identity fraud and transaction fraud were the categories that grew over the past year.
Risk factors for identity fraud have increased over the past two years, increasing by 5.5% in 2024 and 12% in 2023. This trend, the company said, is likely due to more credit programs for those with Individual Tax IDs. More Numbers Than Numbers (ITIN).
“Identity verification data for ITINs is not as mature as SSN-based identities, so there is limited verification information,” CoreLogic said.
Transactional fraud risks have also increased in successive years, increasing by 4.9% in 2024 and 1.9% in 2023. “These increases were driven by higher prices, more active buyers and multiple high-risk sales transactions.” he explained. “Elements of the transaction, such as down payment, use of property, or non-gun related relationships, are more likely to be misrepresented.”
CoreLogic analyzed each state and found that fraud activity was most prevalent in , , , Connecticut and New Jersey. Since mid-2023, California (+14.6%), Connecticut (+10.8%) and Florida (10.2%) have experienced double-digit percentage increases in fraud.
Loan volumes remained relatively stable last year, which the firm attributed to “continued high interest rates.” In fact, the refinancing share of the market from mid-2022, Remaining in the range of 24% – 27.5%, it started a campaign of tariff increase.
In 2023, there was a shift away from matching business purchase loans to policyholders. Federal Housing Administration (FHA). This change did not happen this year.
“The stability in the volume of loans, as well as the types of transactions, in the last two years is reflected in the relative stability of the aggregated National Mortgage Fraud Index. Fluctuations in the index are more indicative of small changes in credit segments than large changes in the credit environment,” said Josh Wilson, principal fraud risk modeler for science and analytics at CoreLogic.
