Loan Defect Level Remains Steady – NMP Skip to main content

Loan Defect Level Remains Steady

Aug 31, 2017
The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage applications increased by 7.4 percent from November 2018 to December 2018

The frequency of defects, fraudulence and misrepresented information submitted in mortgage applications remained the same in July as compared with June and was 20 percent lower than one year earlier, according to the Loan Defect Index from First American Financial Corp.
 
The Defect Index for refinance transactions increased 1.4 percent month-over-month and is 20.3 percent higher than a year ago, while the Defect Index for purchase transactions remained the same from June to July and is up 15.2 percent compared to a year ago.
 
“Finally, after seven consecutive months of increasing defect, fraud, and misrepresentation risk, no change compared to last month is welcome news,” said Mark Fleming, Chief Economist at First American. “In particular, purchase transactions, which are inherently more at risk of defects, fraud and misrepresentation, showed no increase compared to a month ago. One month doesn’t establish a trend, so it will be important to see if we’ve reached a turning point in the long-run trend of increasing defect risk.”

 
About the author
Published
Aug 31, 2017
Strong Jobs Report Threatens Mortgage Rate Rally

October hiring more than doubled expectations, pushing Treasury yields higher

Nov 06, 2026
Fed Holds Rates, But Pricing Pressures Persist

Rising Treasury yields and fresh inflation data complicate rate locks, borrower qualification, and lender margins as markets anticipate another hike in December

Oct 29, 2026
Zippy Adds Capital For Manufactured-Home Lending Push

The $20 million investment from Saluda Grade will support expansion beyond 27 states and new loan products across wholesale, retail, and community channels

Oct 16, 2026
Inflation Hits 3.7%, Putting Mortgage Rate Relief At Risk

September’s inflation pickup puts recent rate improvements at risk, potentially eroding affordability gains from lower home prices and seller concessions

Oct 14, 2026
PLACE Acquires Ardley, Expanding Push To Turn Existing Borrowers Into New Loans

The latest deal connects borrower retention technology with Maxwell's origination platform and PLACE's real estate network, creating new opportunities for lenders

Oct 09, 2026
Equifax, TransUnion Launch New Tools To Cut Credit Report Costs

Both bureaus introduce ways to purchase credit scores separately from reports, while Equifax reports growing VantageScore adoption and extends $1 pricing through 2028

Oct 09, 2026