Tuesday, September 13, 2022 / by Dave Magua
Mortgage lenders face heightened risk of income, property fraud
As they pivot from refinancing existing homeowners to serving homebuyers, mortgage lenders face heightened risk from fraudulent schemes that pump up a homebuyer’s income and assets or misrepresent the value of the property being sold.
That’s according to the latest Mortgage Fraud Report released Monday by analytics firm CoreLogic, which found the risks of income fraud was up 27.3 percent during the second quarter when compared to a year ago.
Purchase loans are more susceptible to fraud and now account for more mortgage transactions than refinances, the report noted. When homeowners refinance, there’s no transfer of ownership, no sales commissions paid to real estate agents, and most of the proceeds go to a lender. In purchase transactions, borrowers may not have a strong financial history, and there are more parties involved — including real estate agents and a seller who’s receiving the loan proceeds.
“Most industry experts and risk ...
That’s according to the latest Mortgage Fraud Report released Monday by analytics firm CoreLogic, which found the risks of income fraud was up 27.3 percent during the second quarter when compared to a year ago.
Purchase loans are more susceptible to fraud and now account for more mortgage transactions than refinances, the report noted. When homeowners refinance, there’s no transfer of ownership, no sales commissions paid to real estate agents, and most of the proceeds go to a lender. In purchase transactions, borrowers may not have a strong financial history, and there are more parties involved — including real estate agents and a seller who’s receiving the loan proceeds.
“Most industry experts and risk ...
