In a recent 12-month span, Washington, D.C. became one of the nation’s riskiest regions for mortgage application fraud.
According to a recent CoreLogic application fraud report, D.C. saw a 9 percent year-over-year rise in risk during the second quarter. This increase places the district as the sixth riskiest state for application fraud.
“D.C. ranks in the top five for income, property and undisclosed mortgage debt application fraud,” the report stated.
Undisclosed mortgage debt application fraud is when a loan applicant intentionally fails to disclose additional mortgage debts during the mortgage origination process.
When a property value is intentionally misrepresented at a higher value than the true market value, property application fraud has occurred.
“In the markets where fraud remains strong, there are also significant inventories of distressed properties,” said Susan Allen, senior vice president of mortgage analytics at CoreLogic.
“Typically, this leads to large value discrepancies with nearby properties, which increases the risk of incorrect valuation, fraud-for-profit schemes, and occupancy fraud on properties recently converted to rentals.”
