Interthinx National Mortgage Fraud Risk Index Drops to Lowest Mark Since Q2 2009
Continued Growth in Employment/Income Fraud Risk Bears Watching
AGOURA HILLS, Calif.--(BUSINESS WIRE)-- Interthinx has released its quarterly Mortgage Fraud Risk Report covering data collected in the first quarter of 2012. According to the most recent analysis, the national Mortgage Fraud Risk Index decreased by 4.3 percent from last quarter and 3.1 percent from one year ago, dropping below the 140 mark for the first time since the second quarter of 2009. At the same time, employment and income fraud risk is on the rise, up 5 percent from fourth-quarter 2011, up 18 percent over last year, and up by 37 percent over the past two years. Company analysts believe the continued increase is due to misrepresentation of borrower data to meet debt-to-income thresholds required by lenders.
Other results uncovered in the most recent report include:
- Nevada regained the mantle of Riskiest State, after being displaced by Arizona in fourth-quarter 2011.
- Florida was the third riskiest state after Nevada and Arizona. It contains the two riskiest metropolitan statistical areas (MSAs) Cape Coral and Miami and half of the top ten riskiest ZIP codes in the nation.
- California, a historically high-risk state, experienced a significant decline, with its index value falling from 192 last quarter to 173 this quarter. The decrease is most apparent in the states Central Valley MSAs and is epitomized by Stockton, which slipped to seventh in the list of riskiest MSAs after occupying first place for the past three quarters.
- The New York tri-state area (defined as the New York City metropolitan area along with the Connecticut metro areas of Bridgeport and New Haven and the New Jersey metro areas of Atlantic City and Ocean City), highlighted last quarter because of a significant increase in risk, saw additional increases in risk this quarter. In particular, New Jersey surpassed California as the fourth riskiest state its highest rank since the inception of this report. And New York moved into tenth place the first time it has entered the top ten.
- As already-low mortgage rates have fallen further to new historical lows, refinancing activity has surged. The resulting change in the composition of loan applications is at least partly responsible for many of the trends seen over the last year.
The full report is available at http://www.interthinx.com/pdf/12_Q1MFRR_052112_FNL.pdf.
Our risk mitigation experts have been diligently monitoring the rise in the Employment/Income Fraud Risk Index, stated Kevin Coop, president of Interthinx. In response to and in step with our continued commitment to provide highly effective risk mitigation technology, Interthinx plans to release enhanced functionality within FraudGUARD® that will allow lenders to reverify a borrowers income at least ten days before closing. The feature can be used on any verification (instant or researched) originally received from The Work Number® within FraudGUARD.
The Mortgage Fraud Risk Report is an Interthinx information product created by an internal team of fraud experts. This is the twelfth time Interthinx has released its quarterly report. The report provides deeper insight into current fraud trends through the analysis of more than 12 million loan applications amassed from the industrys use of the Interthinx FraudGUARD loan-level fraud detection tool.
Interthinx, a Verisk Analytics (VRSK) subsidiary, is a leading national provider of comprehensive risk mitigation solutions focusing on mortgage fraud, collateral risk and valuation, regulatory compliance, forensic loan audit services, loss mitigation, and loss forecasting. With more than 20 years of experience in customizable risk evaluation technology, Interthinx offers proven and effective predictive analytics to the residential mortgage industry through its experience with millions of loan applications and fraud incident data from thousands of monthly loan reviews. Throughout the mortgage life cycle, the Interthinx suite of services can increase the value of client portfolios with its comprehensive and holistic approach to loan quality and compliance. Winner of multiple awards for technology, Interthinx helps clients reduce risk, increase operational efficiencies, satisfy regulator demands, manage data verification, remain compliant, and mitigate loan buybacks. The Interthinx quarterly Mortgage Fraud Risk Report is a standard for the financial services industry. For more information, visit www.interthinx.com or call 1-800-333-4510.
Rick Grant, 800-979-9049
Source: InterthinxCopyright Business Wire 2012