Mortgage Fraud Trends Reports
Mortgage Fraud Brief – Third Quarter, 2016
The CoreLogic Mortgage Fraud Brief analyzes the metro areas with the highest mortgage fraud risk on a quarterly basis, and offers quarterly mortgage fraud insights based on analysis of trends found in residential mortgage loan applications processed by LoanSafe Fraud Manager.
The Mortgage Fraud Brief covers:
- Quarterly insights based on CoreLogic analysis of mortgage applications
- Highest ranking fraud risk metro areas
2016 Annual Mortgage Fraud Report
The CoreLogic Annual Mortgage Fraud Report analyzes the collective level of loan-application fraud risk the mortgage industry experienced from Q2 2015 to Q2 2016.
The annual report includes:
- The number of mortgage applications estimated to have indications of fraud
- The mortgage Application Fraud Risk Index – Nationally and Top CBSAs
- Analysis of Six Mortgage Fraud Components
- Undisclosed Real Estate Debt
- And much more
CoreLogic develops the index based on residential mortgage loan applications processed by CoreLogic LoanSafe Fraud Manager™, a predictive scoring technology.
Application Fraud Risk Index Methodology
The CoreLogic Mortgage Application Fraud Risk Index represents the collective level of fraud risk the mortgage industry is experiencing in each time period, based on the share of loan applications with a high risk of fraud. The index is standardized to a baseline of 100 for the share of high-risk loan applications nationally in the third quarter of 2010. Each 1 point change in the index represents a 1 percent change in the share of mortgage applications having a high risk of fraud. In previous reports, the national mortgage fraud index had a static weighted average across indexes computed for various loan segments. The static weighting method ensures that the changes in loan application volume between segments with different fraud characteristics do not spuriously indicate a change in fraud risk patterns. Based on CoreLogic latest research findings, it has been deemed that the national trend is not susceptible to spurious change and the segment weighting has been adjusted quarterly to track market changes.
The number of expected fraudulent applications is estimated by applying the rate of applications in the CoreLogic Mortgage Fraud Consortium data with high risk of fraud to the estimated loan application volume in each quarter and geography. Expected fraudulent mortgage applications are defined as having a high risk of fraud based on the CoreLogic LoanSafe Fraud Manager score.
CoreLogic Mortgage Fraud Consortium data also provides the average application loan amount by quarter and geography for high-risk fraud scores based on the LoanSafe Fraud Manager score. The average loan amount for applications with a high risk of fraud combined with the number of expected fraudulent applications is used to determine the expected total fraudulent application loan amount by quarter and geography.
The application-fraud indexes are based on specific CoreLogic LoanSafe Fraud Manager alerts. These alerts are computed consistently across time for all CoreLogic Mortgage Fraud Consortium members, regardless of whether the client has the alerts enabled or not. Thus, increased firing of an alert indicates increased risk of the corresponding fraud type. Because the CoreLogic Mortgage Application Fraud Risk Index is based on the LoanSafe Fraud Manager score, it provides a more comprehensive and robust indication of fraud trends than would result from simply summing the fraud type indexes.