Mortgage fraud risk saw a modest uptick toward the end of 2023, according to CoreLogic’s latest Mortgage Application Fraud Risk Index, although it remained largely stable on a year-over-year basis.
The index reached 127 in Q4 2023, marking a 2.7% increase from the previous quarter, but compared to Q4 2022, the index decreased by 1%.
Despite these fluctuations, overall risk levels have remained relatively flat. As expected, mortgage application volumes dipped in the fourth quarter due to seasonal trends. The purchase loan share stayed high, exceeding 70% for the seventh consecutive quarter.
Government-backed purchase loans, particularly those from the Federal Housing Administration (FHA), continued to rise and accounted for 27% of all purchase transactions due to their lower down payment requirements.
Geographic market risks have remained largely unchanged, with the same 15 metro areas topping the risk list, although their specific rankings have shifted slightly.
Miami; Bridgeport, Connecticut; Poughkeepsie, New York; New Orleans; and New York City were the five most at-risk metros.
CoreLogic’s report highlights an increasing trend of income falsification, in which borrowers inflate their income through new wage-based jobs following periods of self-employment.
