Top 10 States with Highest Fraud Risk
The top 10 states show the highest levels of riskier loans. Geographic risk is determined from mortgage applications scored from that area for that period. Factors that may influence an area's risk include the volatility of real estate prices, delinquency trends that increase the risk of distress-based fraud schemes, and levels of investment activity. The area's ratio of refinance to purchases and loan program mix also impacts the risk. Legal differences between states may play a role as well; varying foreclosure timelines, recording practices, and costs to originate a loan are examples that indirectly impact risk.
New York
220
% DIFFERENCE
Florida
220
% DIFFERENCE
California
220
% DIFFERENCE
Connecticut
220
% DIFFERENCE
New Jersey
220
% DIFFERENCE
Rhode Island
220
% DIFFERENCE
Texas
220
% DIFFERENCE
Nevada
220
% DIFFERENCE
Los Angelas
220
% DIFFERENCE
Maryland
220
% DIFFERENCE
Top 25 CBSA Data
These are the top 25 metro areas with the highest fraud index values.
Top 100 Metropolitan Areas
The Metropolitan Area indexes offer a more specific view of risk than the state level. The indexes of the 100 most populous metropolitan areas show that geographic risk may vary widely even within the same state. Indexes in smaller population areas will have greater volatility, especially when loan volumes are depressed.
Top 25 Metropolitan Areas
The Top 25 Metropolitan Areas have the highest risk indexes. Local factors, such as high levels of flipping, delinquencies, or concentrations of investment activity, may drive the risk. Risk managers should familiarize themselves with the geographic influences of areas where they see a concentration of high-risk loans. Consortium members can view their company's score trends and benchmark them to the consortium using the reporting in LoanSafe Connect.
Purchase/Refi Split and National Fraud Trends
Purchase transactions generally have higher risk than refinances, due to complex motivations, greater urgency, and more interested parties.
The decrease in the risk index in 2020 coincides with low interest rates in the pandemic, which resulted in a surge in low-risk rate-reduction refinances. The index had a sharp increase as rates increased and there were fewer low-risk loans. The last two years have had stable risk.
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