CoreLogic: Mortgage Application Fraud Risk Index increased in Q1

A few excerpts from CoreLogic: Q1 2021 Mortgage Fraud Brief

The CoreLogic® National Mortgage Application Fraud Risk Index (Index) increased by 11.9% for the first quarter of 2021—from 110 to 122. The year-over-year trend is up 7.7% from Q1 2020 (at 113).

Last quarter we noted an uptick in income reasonability alerts for both purchases and refinances and that trend continued in Q1. Valuation alerts increased for all transactions, due to rapid home price increases as demand exceeds supply. We observed a slight increase in occupancy alerts for refinances, along with a decrease in flipping alerts for purchases.

We expect fraud risk to continue to rise in 2021, fueled by an insufficient supply of affordable housing and rising interest rates that will change the purchase/refinance mix. New guidelines on GSE financing for investment and second homes, including a 7% cap and stricter underwriting guidelines have the potential to heighten occupancy misrep motivations.
emphasis added

CR Note: This is still low, but something to watch.