Record refinancing volume continues to drag mortgage fraud risk down
Overall mortgage fraud risk posted a sharp decline at the end of the second quarter of 2020, but purchase applications told a different story. Record-low mortgage rates and the surge in refinance volume continued to push the overall fraud risk down. The CoreLogic Mortgage Application Fraud Risk Index showed a 26.3% year-over-year decrease at the end of the second quarter – marking the second year of substantial drop in risk. Throughout Q2 2020, CoreLogic estimated one in 164 mortgage applications, or 0.6% of all applications, contained indications of fraud. This figure was lower than the reported one in 123 mortgages or 0.8% in Q2 2019. However, risk in purchase applications grew by 6%, with investment properties driving the highest risk in both purchase and refinance segments. "The large drop in fraud risk in the past year was primarily driven by record-high refinancing, which is traditionally lower risk trans
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