-CoreLogic National Mortgage Fraud Index Reaches
Highest Levels since 2007-
CoreLogic® (NYSE: CLGX), a leading provider of information,
analytics and business services, today released its
2012 Mortgage Fraud Trends Report which estimates the
mortgage lending industry will originate $13 billion in
loans containing fraudulent information, a $1-billion
increase over the 2011 and 2010 figures. CoreLogic projects
an increase in losses due to a greater number of mortgage
fraud incidents, driven by higher 2012 mortgage origination
volumes, as well as sharp increases in employment and
The report highlights findings from the CoreLogic National
Mortgage Fraud Index, which provides a relative basis of
comparison over time for residential loan origination
mortgage fraud risk in the United States and represents the
collective level of mortgage fraud that is likely to occur.
It includes risk indices across multiple fraud types
including employment, identity, income, occupancy, property
and undisclosed debt. CoreLogic evaluates approximately 80
percent of all mortgage applications in the U.S. for
potential fraud and tracks suspected and confirmed
fraudulent activity on existing loans.
The CoreLogic National Mortgage Fraud Index rose 6.23
percent in the first quarter of 2012 to 85 from the first
quarter of 2011 when the index stood at 80. Overall the
CoreLogic National Fraud Index increased by 27.5 percent
from 67 at the first quarter of 2009, which was the lowest
level since CoreLogic first established the index.
"Mortgage fraud is a multi-billion dollar criminal activity
that continues to be a critical concern for the mortgage
banking industry. Increased risk and financial loss
associated with mortgage fraud has a direct negative impact
on a lender's bottom line," said Susan Allen, vice
president, Product Management for CoreLogic. "Heightened
awareness and analysis of emerging mortgage fraud threats
are vital as criminals continuously look for opportunities
to gain an unscrupulous profit at the expense of the
lending community, taxpayers and homeowners."
Key findings in the CoreLogic 2012 Mortgage Fraud Trends
Nevada, Arizona, Georgia, Michigan and Florida
experienced the highest levels of mortgage fraud risk at
the state level. Chicago is the riskiest city for the
second consecutive year followed by Atlanta; Oakland,
Calif.; Orlando, Fla.; and Kissimmee/St. Cloud, Fla.
Employment fraud risk rose by 50 percent between the
first quarter of 2011 and the first quarter of 2012
driven by continued challenges in the U.S. labor market.
Florida, Nevada and Arizona, all with above-average rates
of unemployment, lead the nation in employment fraud
Identity theft is among the fastest growing mortgage
fraud trends. Identity-related fraud alerts increased by
44 percent from the first quarter of 2011 to the first
quarter of 2012. Nevada, Alaska and Mississippi have the
highest levels of identity fraud risk.
Mortgage fraud Suspicious Activity Reports (SARs) are on
pace to reach an all-time high of 117,106 for 2012,
according to the Department of the Treasury's Financial
Crimes Enforcement Network (FinCEN), which issues the
SARs. Financial Institutions are required to file a SAR
when there is any indication of a legal or regulatory
violation within a mortgage application. Filings in 2010
and 2011 accounted for nearly 37 percent of all filings
over the previous 10 years.
Short sale fraud losses will reach approximately $325
million this year, representing a $25-million increase
over 2011. The increase in short sale fraud losses is due
to a projected 10-percent increase in short sale volume,
which is expected to reach a five-year high in 2012.
California, Florida and Arizona have the highest rate of
suspicious short sales and account for more than half of
all short sales in the U.S.
CoreLogic (NYSE: CLGX) is a leading residential property
information, analytics and services provider in the United
States and Australia. Our combined data from public,
contributory and proprietary sources spans over 700 million
records across 40 years including detailed property
records, consumer credit, tenancy, hazard risk and location
information. The markets CoreLogic serves include real
estate and mortgage finance, insurance, capital markets,
transportation and government. We deliver value to our
clients through unique data, analytics, and workflow
technology, advisory and managed services. Our clients rely
on us to help identify and manage growth opportunities,
improve performance and mitigate risk. Headquartered in
Irvine, Calif., CoreLogic operates in seven countries. For
more information, please visit www.corelogic.com.
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