Skip to main content

Loan Defect Index Ticks Upward

Phil Hall
Apr 30, 2018
The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage applications decreased by 1.2 percent from February to March

The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage applications decreased by 1.2 percent from February to March, according to First American Financial Corp.’s latest Loan Application Defect Index report. On a year-over-year basis, the Defect Index increased by 3.8 percent in March.
The Defect Index for refinance transactions was up by 1.4 percent from the previous month and was 11.1 percent higher than a year earlier. The Defect Index for purchase transactions fell 2.2 percent from February but was 2.3 percent higher than the March 2017 level.
“A market with fewer refinance transactions, greater numbers of second home and investment property transactions and more multi-unit and condo property transactions will be riskier,” said
Mark Fleming, Chief Economist at First American.
However, Fleming added that the national index reading may not truly represent the idiosyncrasies of individual markets.
“In fact, substantial differences exist among the 100 markets that we track with the Loan Application Defect Index,” Fleming continued. “For example, the riskiest market this month, Little Rock, Ark., is almost twice as risky as the safest market, Rochester, NY. Defect risk levels can change dramatically over time as well. In the last three months, six markets experienced an increase in defect, fraud and misrepresentation risk of more than 10 percent, while three other markets experienced a decrease of more than 10 percent. The point is, just as real estate is driven by local market conditions, so is defect risk.”

Apr 30, 2018
CFPB Reports Trends In Financial Assistance

The latest developments from this study reveal that most consumers have exited the payment assistance they received at the start of the pandemic.

Analysis and Data
Jul 14, 2021
CFPB Orders GreenSky To Refund $9M In Unauthorized Loans

The consent order requires GreenSky to refund or cancel up to $9 million in loans for the customers harmed by this illegal conduct.

Regulation and Compliance
Jul 13, 2021
CFPB Warns Landlords And Consumer Reporting Agencies To Report Accurate Rental Information

Inaccurate rental or eviction information can unfairly block families and individuals from safe, affordable housing.

Regulation and Compliance
Jul 01, 2021
FHFA Mandates Quarterly Fair Lending Reports

FHFA issued orders for all enterprises to submit quarterly Fair Lending Reports with data and information to improve the FHFA’s capabilities. 

Regulation and Compliance
Jul 01, 2021
FHFA Follows CFPB To Protect Borrowers Once COVID-19 Foreclosure And Eviction Moratoriums End

The Federal Housing Finance Agency made it clear that Fannie Mae and Freddie Mac servicers are not permitted to make first notice or filing for foreclosure that would be prohibited by the CFPB protections for borrowers affected by COVID-19.

Regulation and Compliance
Jun 30, 2021
CFPB Finds Evidence Of Redlining And Deceptive Acts In 2020

Enforcement actions resulted in more than $124 million in consumer remediation and civil money penalties in 2020

Regulation and Compliance
Jun 29, 2021