Mortgage Fraud Increase Makes It Harder to Get Loans

Mortgage fraud is declining, but lending is still tight
Mortgage fraud is declining, but lending is still tight

While you're likely to still hear about mortgage fraud cases on the rise, the actual trend for new mortgage fraud is down 25 percent.

According to the 2010 CoreLogic Fraud Index, the mortgage fraud cases making it to the courts today primarily happened between 2006 and 2009. In fact, CoreLogic estimates that $14 billion in fraud losses were experienced by lenders in 2009. But yesterday's fraud increases are causing headaches for today's borrowers.

Why should homebuyers care about fraud?

CoreLogic found a high correlation between fraud risk and subsequent default rates. I'll bet you're not surprised to hear that, especially when you think of the so-called liar loans, or no-income loans, that were so prevalent during the housing bubble. As an everyday borrower doing the right thing, the efforts to recognize mortgage fraud are likely making it harder for you to get a mortgage.