CoreLogic Releases Mortgage Fraud Trends Report Update

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November 17, 2010, Santa Ana, Calif. –

—Data Analyzed from 2005 through Second Quarter 2010 Finds Fraud Migrating Toward Distressed Sale Flipping and FHA Loan Programs—

CoreLogic (NYSE: CLGX), a leading provider of consumer, financial and property information and business services, today released an update to its 2010 Mortgage Fraud Trends Report which states that mortgage fraud increased by more than 20 percent since the fraud rates reached their lowest point in early 2009. The increase in reported fraud by lenders is attributed to fraudsters migrating toward higher risk, high volume loan programs, including those offered by the Fair Housing Administration (FHA), Home Affordable Refinance Program (HARP), as well as short sales and real estate owned (REO) sales. This latest report is based on a new analysis of seven million representative loan files from the CoreLogic Mortgage Fraud Consortium database.

“Despite increased fraud activity during 2010, the industry has made substantial progress in curbing fraud from the levels it reached during the height of the market in 2007. Fraud continues to shift to areas of the lending business where large volume increases occur over short periods of time, or where advanced risk mitigation processes are not squarely in place,” said Tim Grace, senior vice president of Fraud Solutions at CoreLogic. “In fact, during the seven quarters CoreLogic analyzed for this update, fraud risk associated with refinancing grew approximately 30 percent. We also found that REO sales pose a greater risk than short sales, with one in every 24 REO sale transactions associated with a fraudulent resale. The only way lenders can preempt these evolving fraud schemes and mitigate the associated risks is through collective, consortium-based tools and information.”

CoreLogic used a robust, predictive analytics model to analyze and issue a fraud score for each of the seven million loans issued from the first quarter of 2005 through the second quarter of 2010. The peak of mortgage fraud activity was in 2006, at a fraud rate of 109. The data showed fraud reached its lowest point in early 2009 at a fraud rate of 68, but as of the second quarter of 2010, it has increased 20 percent to a fraud rate of 82. Although it is growing again, it is still well beneath the peak.

Additional Report Highlights

  • Increased lending through FHA and HARP loan programs accounted for most of the increased risk in 2009 and 2010.
  • Second quarter of 2010 had the highest volume of single family resident short sales with nearly 60,000 short-sale transactions.
  • REO transaction volume is more than twice that of short sales with 120,000 REO sales in the second quarter of 2010.
  • Investment companies are involved in a disproportionately higher percentage of suspicious resales. Figure 8 in the report provides more detail.
  • Flipping and flopping hot spots in the US are Southern California, Phoenix, Detroit and Atlanta.
  • Lenders have reported that occupancy fraud, employment fraud and undisclosed debt are on the rise. Figure 10 in the report provides more detail.
  • CoreLogic is able to produce fraud metrics at the national, state, MSA, SCF and neighborhood levels. The riskiest neighborhood in the US is Douglas in the District of Columbia, ZIP 20020. Other top ranking neighborhoods include Reynoldstown, NC (27101); East Garfield Park, IL (60612); Bedford-Stuyvesant, NY (11205); Castle Hill, NY (10473); Bedford Pine, GA (30308); Brunetti South, FL (32822); Benteen, GA(30312); Baychester; NY (10469); Acorn, CA (94607); Bay Ridge & Fort Hamilton, NY (11209) and Jamaica, NY (11412).

The updated report can be downloaded at http://www.corelogic.com/about-us/researchtrends/mortgage-fraud-trends-report.aspx.

About CoreLogic
CoreLogic is a leading provider of consumer, financial and property information, analytics and services to business and government. The company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. Formerly, the information solutions group of The First American Corporation, CoreLogic began trading under the ticker CLGX on the NYSE on June 2, 2010. The company, headquartered in Santa Ana, Calif., has more than 10,000 employees globally with 2009 revenues of $2 billion. For more information visit www.corelogic.com.

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