After a pause, mortgage fraud risk resumes its decline
Loan application defect risk fell in December after stabilizing the prior month, but it's not dropping as it quickly as it once was, according to First American Financial Corp.
"While overall fraud risk declined in December, the pace of decline was slower than earlier in the year," Mark Fleming, chief economist at First American, said in a press release.
The index, which uses a 100-point scale to measure defect risk, fell to 67 from 68 during the last month of the year.
"Since fraud risk began to decline in March 2019, the average monthly rate of decline has remained fairly constant at approximately 4%. In December, fraud risk declined by a modest 1.5%. The reason? While low mortgage rates and a healthy labor market continue to boost house-buying power and home-buying demand, inventory remains near quarter-century lows," Fleming said.
"Declining fraud risk was consistent throughout the country in December," he added. "Overall fraud risk did not increase in a single state or metropolitan area relative to one year ago, but fraud risk did rise in several markets on a month-over-month basis."
The five states where fraud risk was up the most on a consecutive-month basis during December were Delaware (5.2%, 61), Alaska (5%, 63), Vermont (3.1%, 67), Texas (3%, 68) and New Hampshire (2%, 52).
The five local markets where fraud risk was up the most on a month-to-month basis during December were North Port, Fla. (4.4%, 71), Tucson, Ariz. (4%, 52), Toledo, Ohio (3.6%, 57), Oklahoma City (3.4%, 61) and Provo, Utah (3.2%, 64).