Greater scrutiny has had a positive impact on mortgage fraud
By Jeff Sorg, OnlineEd Blog
(Ocboter 20, 2015) – As of the end of the second quarter of 2015, the CoreLogic® Mortgage Fraud Report shows an 8.9 percent year-over-year decrease in fraud risk, as measured by the Mortgage Application Fraud Risk Index.
Susan Allen, senior vice president of Mortgage Analytics at CoreLogic says, “New regulations, like Qualified Mortgage (QM) and Ability to Repay (ATR), as well as stricter credit overlays, have resulted in greater scrutiny of mortgage applications. Greater scrutiny, in turn, has had a positive impact on the rate of fraudulent applications. In the markets where fraud remains strong, there are also significant inventories of distressed properties. Typically, this leads to large value discrepancies with nearby properties, which increases the risk of incorrect valuation, fraud-for-profit schemes, and occupancy fraud on properties recently converted to rentals.”
Louisiana is the state with the highest year-over-year growth in mortgage application fraud risk at 17 percent; Kansas had the largest decline at 35.2 percent. Jumbo mortgages continue to have the highest fraud risk, followed by low-down payment mortgages.
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Jeff Sorg is a co-founder of OnlineEd®, an online real estate, mortgage broker, and vocational school founded in 1997, where he also serves as Chief Executive Officer, and School Director. Sorg holds vocational and post-secondary school instructor licenses in several states and has authored numerous real estate continuing education and pre-licensing courses and has been awarded the International Distance Education Certification Center’s CDEi Designation for distance education. Memberships include ARELLO (Association of Real Estate License Law Officials), the National Association of REALTORS®, Oregon Association of REALTORS®, and Portland Metro Association of REALTORS®. Awards and service include REALTOR® Emeritus in the National Association, Life Member award in Portland Metro Association and Chairperson of the Oregon Real Estate Forms Committee.
OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.