For several months now, applications for residential loans have seen fewer instances of prospective borrowers trying to mislead home lenders.
The frequency of defects, fraud and misrepresentation in the information submitted in loan applications
was off more than a percent in November.
It turns out that defect and misrepresentation risk on mortgage applications has actually declined for each of the last four consecutive months.
That is according to the
First American Loan Application Defect Index. The index reflects estimated mortgage loan defect rates over time, by geography and by loan type.
Compared to a year earlier, the index has fallen more than eight percent.
First American noted that the index has decreased by nearly 24 percent versus the high reached in October 2013.
“This is the fourth month-over-month decline in a row of defect and misrepresentation risk, equaling the lowest point in the index since its inception and wiping out the upward trend observed in the first half of the year,” the report said. “The Defect Index has fallen almost 5 percent over the last three months. The index is well below the level of risk observed during the three years between 2011 and 2013.”
On just refinances, the index was off three percent from
October and 11 percent from November 2014.
There
was no month-over-month change in the purchase index, though risk on applications for purchase financing has retreated nine percent on a year-over-year basis.
But despite the national improvement, First American Chief Economist Mark Fleming voiced concern over Florida.
“All the major metropolitan areas in Florida are above the national average, and Miami ranks second among the top 100 markets nationally,” Fleming stated in the report.
The District of Columbia saw a four percent rise from October in the index — more than any state. Up similarly were South Carolina and West Virginia, while New Hampshire was up three percent, and Iowa worsened two percent.
