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Mortgage Fraud Risk Reaches New Low

Phil Hall
Feb 28, 2020
Photo credit: Getty Images/Ja'Crispy

The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications during January was down by three percent compared with December and down 28.6 percent from one year earlier, according to the latest Loan Application Defect Index data from First American Financial Corp. January’s Index was the lowest level since First American began tracking this data in 2011.
 
During January, the Defect Index for purchase transactions remained the same compared with the previous month and was down by 17.9 percent compared with one year earlier. The Defect Index for refinance transactions decreased by 5.2 percent from December and plummeted by 33.7 percent from January 2019.
 
“Overall defect risk, as measured by our Loan Application Defect Index, has largely trended down since early 2019 with a few exceptions,” said Mark Fleming, chief economist at First American, who credited “the increasing share of less risky refinance transactions for the low levels of defect and fraud risk.”

 
Published
Feb 28, 2020
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