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Corelogic Releases 2010 Mortgage Fraud Trends ReportSalem-News.com
Risk decreased 25 percent since 2007, yet one in 200 loans still contain misrepresentations that lead to default.
(SANTA ANA, Calif.) - CoreLogic (NYSE: CLGX), a leading provider of consumer, financial and property information and business services, has announced the release of its 2010 Mortgage Fraud Trends Report, a detailed analysis of US mortgage fraud rates and trends. The full report can be downloaded by visiting www.corelogic.com/fraudindex and will be updated on an annual basis.
The CoreLogic Fraud Index™ shows that fraud risk in the mortgage industry has declined by 25 percent since it peaked in the third quarter of 2007. The CoreLogic Fraud Index also found significant trends in mortgage fraud types and loan performance including an estimated one in 200 conforming loan applications during this period contained misrepresentations in the file that could lead to default. CoreLogic produced this first ever predictive and statistical Fraud Index to look at the aggregated level of risk each quarter and compared it to other quarters in a specific time period. For this report, CoreLogic analyzed a representative data sample from its 80 million loan applications from 2005 through 2009, and used a predictive fraud model based on pattern recognition to determine the level of fraud risk by each quarter.
"Lenders' aggressive stance against fraud is having an impact. Our 2010 Fraud Index indicates that mortgage fraud risk is on the decline. But with an estimated $14 billion in fraud losses experienced in 2009 alone, fraud is still a major issue for the mortgage industry," stated Tim Grace, senior vice president of Fraud Analytics, CoreLogic. "While the industry has done good work there is evidence that fraud patterns are changing and becoming increasingly better hidden. By sharing fraud patterns with each other through CoreLogic fraud consortium members' meetings and by statistical pattern recognition fraud scoring, lenders can help stay on top of these new trends and keep risk down."
Another key finding from the report was the fact that there is a high correlation between fraud risk and subsequent default rates. The CoreLogic Fraud Index can also be a leading indicator of future default issues. For example, of the top 12 highest ranking CoreLogic Fraud Index states in 2007, nine were in the top 12 highest ranking default states in 2009, according to the index.
CoreLogic Fraud Index Highlights
CoreLogic has the ability to segment the Fraud Index risk by major fraud type and geographic region. This is significantly beneficial in assisting lenders to understand the risks of doing business in certain areas. For example:
CoreLogic is a leading provider of consumer, financial and property information, analytics and services to business and government. The company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. Formerly, the information solutions group of The First American Corporation, CoreLogic began trading under the ticker CLGX on the NYSE on June 2, 2010. The company, headquartered in Santa Ana, Calif., has more than 10,000 employees globally with 2009 revenues of $2 billion. For more information visit www.corelogic.com.
CoreLogic is a registered trademark of CoreLogic, Inc.
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