The propensity for fraud in mortgage applications is declining from its peak in 2012, and that’s good news for regulators and consumers who never want to see another housing market collapse.
CoreLogic finds that its mortgage application fraud-risk index is down 5.6 percent in the second quarter of 2013, compared to a year ago.
Nonetheless, an estimated $5.3 billion in fraudulent mortgage applications were submitted to mortgage lenders in the second quarter, up about $100 million from the first quarter of 2013.
“Superficially, it may seem that these two indicators are at odds with each other, but the index measures the propensity for fraudulent applications independent of the size of the mortgage market or changes in the prices of homes,” reads CoreLogic’s latest MarketPulse report.
Bottom line: the dollar value of fraudulent applications increases as loan applications and rising application loan amounts increase, even if the index remains unchanged.