Mortgage Fraud Risk Increased In January 2019
Mortgage fraud risk increased by 4.6% according to a First American Loan Application Defect Index report. The report cites declining mortgages rates in conjunction with higher loans applications as two of the major contributing factors to the increase in mortgage fraud risks.
"Nationally, the Defect Index for refinance transactions moved forward 5.1% from December and is up a whopping 20.3% from the same time a year ago," according to HousingWire.
"Notably, the Defect Index for purchase transactions climbed 5.6% from December and is up 3.3% from 2018."
While declining mortgage rates and higher loan applications are some of the major contributing factors, First American Chief Economist Mark Fleming revealed that overall fraud risks have been on the rise since July 2018, "due partially to the impact of natural disasters."
Despite an increase in mortgage fraud risk, Fleming still believes the spring home-buying season should perform well.
"Overall, Fleming said a rise in purchase and refinance applications, coupled with strong first-time home buyer demand and tight inventory, bodes well for an early spring home-buying season," according to the report.
To learn more about the increase in mortgage fraud risk in January, click on the image above.