CoreLogic recently released its annual 2021 Mortgage Fraud Report, the industry standard for nationwide fraud monitoring and analysis. This year’s report shows a 37.2% year-over-year increase in fraud risk at the end of the second quarter of 2021, as measured by the CoreLogic Mortgage Application Fraud Risk Index. The large increase follows a large drop seen in 2020 – a decrease driven mainly by the surge in traditionally low-risk refinances during the pandemic. The current risk level is similar to mid-2019.
An estimated 0.83 % of all mortgage applications contained fraud, about 1 in 120 applications, an increase over the second quarter of 2020, where the estimate was 0.61 %, or about 1 in 164 applications. Risk in the purchase segment increased 6%, with investment properties driving the highest risk in both purchase and refinance populations.
“Refinance opportunities that surged lending volumes during the pandemic may be winding down. The outlook is for fewer low-risk refinances compared to purchases and cash-out refinances, which translates to a higher-risk environment for fraud,” said Ann Regan, executive, product management at CoreLogic.
While most fraud types showed increased risk nationally, both income and property fraud risk decreased slightly, which aligns with the strong job market and home price growth.
Figure 1: Top Five States For Increases in Risk

Figure 2: State Top 10 Index YoY%

CoreLogic’s Mortgage Fraud Report analyzes the collective level of loan application fraud risk experienced by the mortgage industry each quarter. The report, based on residential mortgage loan applications processed by predictive scoring technology CoreLogic LoanSafe Fraud Manager, includes detailed data for six fraud type indicators that complement the national index: identity, income, occupancy, property, transaction and undisclosed real estate debt.
The segments and indexes included in the report have been updated recently. In 2019, CoreLogic created the new Fraud Risk Score Model 4.0, with more granular segmentation to highlight the most relevant fraud risk differences between loan programs. This year, the company launched a new generation of fraud indices to leverage this new model and better control for volatility.
“We deployed our latest Fraud Risk Score Model [4.0] in late 2019. Our 2020 user results show excellent performance, with 46% of the detected frauds falling into the top 5% of our risk-ranked score, and 60% falling into the top 10%. Greater detection and fewer false positives improve the experience for both lender and customer,” said Fabien Huard, senior leader, Science and Analytics at CoreLogic.
For more detailed data and analysis, view the 2021 CoreLogic Mortgage Fraud Report here.