With mortgage fraud slightly on the rise right now, HousingWire staffer Brena Swanson spoke to Bridget Berg, senior director of Fraud Solutions Strategy for CoreLogic about the latest Mortgage Fraud Report from the data provider.
The report showed a 3.9% year-over-year increase in fraud risk in second quarter of 2016. However, even with the small increase in fraud, the report added that an estimated 12,718 mortgage applications, which is less than 1% (0.7%) of all mortgage applications, contained indications of fraud. This is compared with the reported 12,814, or 0.67% in the second quarter of 2015.
What’s most noteworthy about this report is the loan type that’s showing the greatest fraud risk increase is high-LTV purchase loans.
Berg notes that while risk is relatively low right now, “fraud takes a lot time to discover.” “A lot of the bigger fraud schemes don’t get uncovered through traditional quality control,” she explained. “It is possible they are using traditional quality control as their sole method of monitoring, so they are getting false sense of security.”