CoreLogic released its second quarter National Mortgage Application Fraud Risk Index, showing that the index decreased from both the first quarter and year-over-year. The index decreased by 8.7 percent from the first quarter.
The year-over-year trend is down 22.6 percent from the same time last year.
“The share and volume of refinances continued to increase in Q2, as record-low interest rates swell the pool of loans that benefit from the refinancing,” CoreLogic stated in its Mortgage Fraud Brief about the index. “Refinances accounted for 61.4 percent of all applications, up from 59.9 percent last quarter. We continue to see slightly increased risk in conventional purchases, and much greater risk in the investment purchase segment this quarter, but the lower risks in refinances and high refinance volumes keep the national index low.”
It noted that investment purchases have increased in risk, but decreased in volume.
“Many lenders are tightening credit parameters due to the uncertain economy,” CoreLogic stated. “This seems evident in the decrease we have seen in volumes of investment purchase applications. They are at their lowest level since the inception of the index; currently at 0.9 percent compared to 1.9 percent one year ago.”
It reported that the Core Based Statistical Areas (CBSAs) with the highest fraud risk are Miami-Fort Lauderdale-West Palm Beach, Fla. (down 10 percent from the first quarter); Las Vegas-Henderson-Paradise, Nev. (up 2 percent); Orlando-Kissimmee-Sanford, Fla. (down 5 percent); New York-Newark-Jersey City, N.Y.-N.J.-Pa. (down 11 percent); and Delton-Daytona Beach-Ormond Beach, Fla. (down 21 percent).
“Most areas of the country are reflecting the risk decrease we see at the national level,” CoreLogic stated. “In the CBSA chart, most highest-risk areas are showing a risk decrease or modest increase quarter-over-quarter. However, the Springfield, Mass., CBSA shows a 37 percent increase. This is driven by a higher share of purchases overall, a higher level of investor purchases, and an increase in income red flags in Q2. This CBSA is smaller and thus more subject to volatility in the index.”