Mortgage fraud risk was up 2.7% quarterly and down 1% annually during the fourth quarter of 2023 — minor fluctuations that signify that mortgage risk is generally flat, according to CoreLogic.
The company’s National Mortgage Application Fraud Risk Index for Q4 2023 had a reading of 127, down from 128 in the same quarter in 2022.
The index has seen a measure of stability for the past few quarters, even as the level of purchase loans, which are traditionally higher risk compared to refinances, has vastly outpaced safer refinance loans. The fourth quarter of 2023 saw the purchase share of total mortgages remain above 70% for the seventh straight quarter, due largely to higher interest rates.
Geographic risk changed little as well. The 15 metros with the highest fraud risk were the same as the quarter prior, with small shifts in positioning between some cities. Despite shedding 4 percentage points from its mortgage fraud risk, Miami remained atop the list, with a fraud risk index reading of 310 — 183 points higher than the national reading.
Miami was followed by Bridgeport, Connecticut (with a reading of 254); Poughkeepsie, New York (231); New Orleans (222); and New York City (217). Among highest fraud risk metros, Bridgeport saw the largest increase in fraud risk quarter over quarter at 17%.
Anecdotal feedback about risk trends from CoreLogic clients has been concentrated on income falsification, wrote Bridget Berg, principal, industry solutions, property intelligence at CoreLogic.
“Many of our clients have noted that instances of income falsification have increased. The current trend centers around borrower income being inflated by a new, high-wage job after previously being self-employed,” she wrote on CoreLogic’s website.
