AGOURA HILLS, Calif.--(BUSINESS WIRE)--Interthinx, Inc., a subsidiary of First American Financial Corporation (NYSE: FAF) and a leading provider of comprehensive risk mitigation solutions for the financial services industry, has released its quarterly interactive Mortgage Fraud Risk Report covering data collected in the second quarter of 2014.
In the second quarter of 2014, the national Mortgage Fraud Risk Index value is 100, the same value as it was in Q1 2014 and down 4 percent from Q2 2013. The national Property Valuation Fraud Risk Index is 129, up 1 percent from last quarter and 23 percent from a year ago. Of note, six of the top ten Metropolitan Statistical Areas (MSAs) for Property Valuation Fraud Risk this quarter are in Florida, including the top four spots. Fort Walton Beach-Crestview-Destin is the riskiest MSA for Property Valuation Fraud Risk this quarter, with an index of 242, up 91 percent from a year ago.
The 10 riskiest counties for Employment/Income Fraud Risk on average have a much higher increase in House Price Index (HPI) over both a one-year and a five-year period. Over five years, HPI for counties in the Employment/Income Fraud Risk top 10 increased 43 percent on average compared to 15 percent for counties not on the list. These findings suggest that decreases in housing affordability are a significant factor in employment/income misrepresentation rates.
Other notable findings in the report include the following:
- Despite a 12 percent drop from last quarter, California remains the riskiest state with a Mortgage Fraud Risk Index of 128, with very high risk in all fraud types considered. Florida and New Jersey are tied at number two, each with an index of 122. Florida’s rank is unchanged from last quarter; New Jersey jumped from seventh place. Rounding out the top 10 this quarter are Arkansas, Delaware, Oklahoma, Arizona, Connecticut, Washington D.C. and Nevada.
- Identity Fraud Risk has increased 9 percent from last quarter. The increase is due to a higher frequency of name/Social Security number (SSN) inconsistencies detected by the SSN trace and by comparisons with previously submitted applications. Fayetteville-Springdale-Rogers Arkansas-Missouri remains at number one with an index of 252, a 19 percent increase from Q1 2014. Four MSAs from California are in the top 10, including Vallejo-Fairfield at number two with an index of 161.
- Although California and Florida continue to present high levels of opportunity for fraud and have high index values, risk in New Jersey, the Midwest and the South is rising.
The full report is available at: http://www2.interthinx.com/l/17902/2014-09-18/fm4nc.
“Mortgage fraud is typically a trailing indicator of other important shifts in the market. For example, in a quality-focused lending environment, it isn’t surprising to see borrowers getting creative with employment and income to meet requirements, or, more insidiously, to engage in outright identity fraud,” said Jeff Moyer, president of Interthinx. “That’s why, as property prices adjust and normalize market-by-market across the country, and loan quality standards more closely define a qualified borrower, mortgage lenders are carefully monitoring fraud trends and implementing data-intensive risk management protocols.”
The Mortgage Fraud Risk Report is an Interthinx information offering created by an internal team of fraud experts. This is the twenty-first time Interthinx has released its quarterly report. The report provides deeper insight into current fraud trends through the analysis of millions of loan applications amassed from the industry’s use of the Interthinx FraudGUARD® loan-level fraud detection tool.
The Fraud Risk indices are influenced by many factors including house price indices, concentrations of defaulted and foreclosed properties, market demand and supply, employment rates, collusion by parties to loan transactions, regulation, and changing consumer patterns. By analyzing the data in the Mortgage Fraud Risk Report, it is possible to reach conclusions linked to the overall market experience and gain actionable intelligence to empower risk mitigation in real time.
For more information about Interthinx and its Mortgage Fraud Risk Report, visit http://www.Interthinx.com.
Interthinx, Inc., a subsidiary of First American Financial Corporation (NYSE: FAF), provides essential solutions to mitigate risk in the mortgage lending marketplace. Interthinx offers capabilities in mortgage fraud and verification, property valuation, compliance, quality control and loss mitigation that are used by the nation's top financial institutions. Interthinx helps its clients minimize risk, increase operational efficiencies, satisfy regulator demands, manage data verification and remain compliant. For more information, visit www.interthinx.com or call 1-800-333-4510.
About First American
First American Financial Corporation (NYSE: FAF) is a leading provider of title insurance, settlement services and risk solutions for real estate transactions that traces its heritage back to 1889. First American also provides title plant management services; title and other real property records and images; valuation products and services; home warranty products; property and casualty insurance; and banking, trust and investment advisory services. With revenues of $5.0 billion in 2013, the company offers its products and services directly and through its agents throughout the United States and abroad. More information about the company can be found at www.firstam.com.
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