According to CoreLogic, the increase in refinancing transactions combined with a decrease in purchases of investment property reduced the risk of fraud in mortgage applications to a decade ago in the second quarter.
The mortgage fraud risk index was 102 in the second quarter, down 8.7% from 112 in the first quarter and 22.6% from a year ago when the index was 132.
CoreLogic created the index at 100 in the third quarter of 2010. Since then, the index has been below 110 three times: in the first and second quarters of 2015 and in the third quarter of 2016.
"We continue to see a slightly higher risk with conventional purchases and a much greater risk in the investment buying segment this quarter, but the lower refinancing risks and high refinancing volume keep the national index low," CoreLogic said in its report. "While the risk of buying assets has increased, the relative volume has decreased. Many lenders are tightening credit parameters due to the uncertain economy."
This is reflected in the percentage of investment purchase requests, which was the lowest in the quarter at 0.9% since CoreLogic created the index.
Florida remains a hot bed of fraud risk for mortgage applications. Of the 15 metropolitan areas with the highest index values, eight are in Florida. The Miami-Fort Lauderdale-West Palm Beach area still leads the nation with the highest index value of 196, a 10% decrease from 216 in the first quarter.
Las Vegas ranks second with a 2% increase in fraud risk compared to the first quarter, while Orlando, Florida ranks third with a 5% decrease and New York fourth with an 11% decrease.
In the Daytona Beach, Florida region, the risk of fraud was down 21%, ranking fifth on the list compared to the second in the first quarter.
Springfield, Massachusetts saw the largest increase in fraud risk, at 37%, and ranked ninth in the quarter at 152, compared to 111 in the first quarter.