The American City With Most Mortgage Fraud Risk
The U.S. housing market has exploded. The carefully followed S&P Corelogic Case-Shiller Index showed home prices in America rose 19.8% in August compared to the same month last year. In three cities–Phoenix, San Diego, and Tampa–the number was up over 25%.
What has triggered the surge? Americans are relocating in large numbers. People have left the large and expensive coastal cities like New York and San Francisco to less expensive cities inland. Places like Boise have posted record increases in housing prices and demand. The home price increase has also been helped by mortgage rates that are extremely low. And, the fact that many Americans can work from home has caused people to think more about where they can simultaneously work and live.
There is a dark side to the housing boom. Real estate research firm CoreLogic has just issued its 2021 Mortgage Fraud Report.
The report covers data from the second quarter of this year. Among the primary conclusions:
Nationally, most fraud types showed increased risk. Transaction risk showed an increase of 34.2% year-over-year. Both income and property fraud risk decreased slightly, which aligns with the strong job market and home price growth.
About one out of 120 mortgage applications included fraudulent activity, the data show. The highest-risk mortgages were for investment property. The lowest risk ones were from VA-backed programs.
There are several kinds of mortgage fraud categories. Among them are people lying about identity, income, jobs, current real estate debt, and situations where a third party is included in a transaction without that being disclosed.
Corelogic looked at fraud rates by both city and state. The cities review was of the top 100 U.S. metros by population. Corelogic created a “risk index.” The higher the number, the worse the risk.
The No. 1 city on the “Top 25 Metro Areas with the Highest Application Fraud Risk” was Las Vegas with a score of 251. It is followed by another very large city–Miami–with a score of 235. The list then jumps to a smaller, and poorer, city–Poughkeepsie–at 206. No other cities have an index above 200.
Click here to read The Most Expensive Cities To Buy A Home
Source: Read Full Article