Over the past year, the risk of bad information being submitted on mortgage applications has worsened. Florida high-rise condominiums are an especially risky category.
As of January 2018, the Loan Application Defect Index was 83. The index was benchmarked to a value of 100 in January 2011 — reflecting currently lower risk.
The index is an estimate of the
level of defects, fraudulence and misrepresentation detected in the information submitted in residential loan applications.
First American Financial Corp. produced the index based on
applications processed through its FraudGuard system.
While there was no change in the index compared to December 2017, it has risen 14 percent since January 2017.
The index for refinance transactions was no different than a month earlier but has jumped 17 percent from the same month last year.
On purchase transactions, a 1 percent month-over-month rise was recorded and an 11 percent year-over-year increase was made.
At 107, Arkansas had the highest index. Next was Idaho’s 99, followed by Florida’s 98, Wyoming’s 97 and North Dakota’s 96.
In Florida, high-rise condominiums in coastal markets were home to some of the highest risk mortgage applications.
New Hampshire’s 61 was the lowest index of any state.
A 40 percent year-over-year rise in South Dakota’s index was the biggest increase of any state. Connecticut’s 4 percent drop was the best improvement.
