Q2 Mortgage Fraud Risk Remains High; Buffalo, New York Up 54%

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The national mortgage application fraud risk index rose from 132 in the first quarter of 2017 to 133 in the second quarter, according to researchers at CoreLogic. The index score was 113 in the second quarter of 2016.

The share of purchase loans in the risk index rose from 60% to 66% sequentially.

CoreLogic’s mortgage fraud risk index is standardized to a baseline of 100 for the share of high-risk loan applications nationally in the third quarter of 2010. Each one-point change in the index represents a 1% change in the share of mortgage applications having a high risk of fraud.

The 10 metro areas with the highest mortgage fraud risk and their index scores are:

  1. Miami-Fort Lauderdale-West Palm Beach, Florida: 259, down 5% sequentially
  2. Buffalo-Cheektowaga-Niagara Falls, New York: 235, up 54%
  3. New York-Newark-Jersey City, NY/NJ: 229, up 1%
  4. Tampa-St. Petersburg-Clearwater, Florida: 205, down 5%
  5. Deltona-Daytona Beach-Ormond, Florida: 199, up 1%
  6. Los Angeles-Long Beach-Anaheim, California: 199, up 7%
  7. Augusta-Richmond County, GA/SC: 190, up 28%
  8. Lakeland-Winter Haven, Florida: 187, down 13%
  9. Jacksonville, Florida: 186, up 13%
  10. Orlando-Kissimmee-Sanford, Florida: 183, up 6%

CoreLogic noted:

Over the past three quarters, the areas with the largest changes in fraud risk indicators … have been smaller CBSAs [Core Based Statistical Areas] in the Rust Belt. Syracuse, New York, Youngstown, Ohio, and now Buffalo, New York. Commonalities between the applications that are pushing the indices higher in these areas include: Higher levels of delinquency, availability of distressed properties, and investment activity by investors from outside the area or local investors buying multiple properties rapidly.

In CoreLogic’s most recent report on mortgage fraud published last September, more than 12,800 mortgage applications (0.7%) in the 12 months through June 2016 contained fraudulent information.