The CoreLogic  Quarterly Mortgage Fraud Brief  is a quarterly report that analyzes the top metropolitan areas with the highest mortgage fraud risk based on the company’s research of trends found in residential mortgage loan applications processed through its LoanSafe Fraud Manager.
According to the report, authored by Bridget Berg , Principal of Industry Solutions and Property Intelligence, a small drop in interest rates was enough to push jumbo refinance volumes to spike in Q3, and overall volumes increased slightly for both refis and purchases. In Q3, purchases were 45.7% of transactions, similar to the second quarter at 46.3%. The small shift to refinances and overall volume increase likely caused the 4.6% national index drop.
As a whole, mortgage fraud decreased due to an increase in refis, which are seen as a lower-risk vehicle for fraud.
The most likely place one would encounter mortgage fraud in the U.S. was in the Las Vegas-Henderson-Paradise, Nevada metropolitan area (population 2.3 million), where the fraud benchmark was at 232 in the third quarter, down from 250 in the second quarter or a 7% drop.
The benchmark for fraud was set at 100 by CoreLogic in 2010.
Two outliers in the dataset were the areas of McAllen-Edinburg-Mission, Texas (population 875,200) and New Orleans-Metairie, Louisiana (population 1.27 million) which each saw a 17% increase in mortgage fraud risk over the last quarter.
While the report did not indicate which type of mortgage fraud was most common, it took many different forms of fraud into account.
“There are several different types of fraud that can impact a mortgage,” the report said. “From occupancy fraud, employment and income fraud to property fraud, external factors can drive what types are fraud are more prevalent than others. Our latest fraud brief highlights key industry trends that are driving specific types of fraud, so you can be aware of what to watch out for.”