Fannie Mae's Day 1 Certainty initiative and automated verification tools at Freddie Mac are set to improve mortgage loan application defect and misrepresentation risk in 2017, according to a report from First American Financial Corp.

These expectations come as improvements in the frequency of defect, fraudulence and misrepresentations came to a standstill in November. First American's Loan Application Defect Index remained unchanged from October to November – though the index did drop 12.8% year over year. The index dropped by 3.4% month over month for refinance transactions.

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