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According to a Fitch Ratings report released Tuesday, risk of fraud and misrepresentation in mortgages has declined. Much of the mortgage fraud risk improvement is credited to legislative changes. National standards for non-depository loan officer licenses were introduced for the first time in 2008. These standards required officers to complete a written test, education courses, and a criminal background check. Additionally, the Ability to Repay rule was implemented in 2014. The ATR rule prohibited stated income loan programs for most mortgage loans.
Lenders have also taken steps to reduce operational and misrepresentation risk including careful watch of quality control results loan officer compensation and underwriters, which are more frequent and comprehensive than prior to 2008. Underwriting and loan origination departments are now typically separated to allow for greater underwriting independence and communication between loan officers and appraisers is limited. Technology advancements such as fraud risk tools and publicly available housing information on the internet have also played a key role in reducing risk.
Auction.com's August 2015 Real Estate Nowcast predicted that seasonally adjusted existing-home sales for August will fall between the rates of 5.46 and 5.86 million annual sales with a targeted number of 5.64 million. Though that would be a 12.9 percent year-over year hike from August 2014, it would be an increase of only 1 percent from July. Auction.com EVP Rick Sharga said, quote, We may be looking at the beginning of a shift in existing-home sales activity. The volume of sales, while continuing to increase, appears to be slowing down. Close quote
