Where There’s Smoking Demand, There’s Defect Risk Fire

first_img  Print This Post The Best Markets For Residential Property Investors 2 days ago Where There’s Smoking Demand, There’s Defect Risk Fire About Author: Brianna Gilpin Servicers Navigate the Post-Pandemic World 2 days ago Home / Daily Dose / Where There’s Smoking Demand, There’s Defect Risk Fire The Week Ahead: Nearing the Forbearance Exit 2 days ago in Daily Dose, Featured, Market Studies, News Data Provider Black Knight to Acquire Top of Mind 2 days ago 2017-06-28 Brianna Gilpin Demand Propels Home Prices Upward 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago June 28, 2017 1,074 Views Related Articles The May 2017 Index reveals an increase in frequency of defects, fraudulence, and misrepresentation in the information submitted in mortgage loan applications by 2.5 percent, compared to April 2017.According to a report by First American, the index estimates the level of defects in submitted mortgage loan applications processed by the First American’s FraudGuard system. The findings are determined based on the frequency that defect indicators are identified. The Defect Index moves higher as greater numbers of defect indicators are found—increases representing a rising level of loan application defects.The Defect Index increased by 13.7 percent since last year. Refinance transactions increased by 3 percent month-over-month with a 9.7 percent increase and purchase transactions rose 11.1 percent in the same time frame.Mark Fleming, First American’s Chief Economist said the Loan Application Defect Index is now reaching levels of risk not seen since 2015.“While risk is growing in both purchase and refinance transactions,” Fleming said, “it’s important to recognize that loan application defect, fraud, and misrepresentation risk remains below the peak reached in 2013.”Fleming said the purchase transaction risk is 13 percent below the peak and refinance transaction risk is 32 percent below.”The purchase-pivot in the housing market continues to add fuel to the fire of the overall level of application, defect, and fraud risk,” Fleming said.According to Fleming, this Loan Application Defect Risk is creating a “heat wave” that is destroying several Southern markets.McAllen, Texas ranked first followed by Charleston, South Carolina; Birmingham, Alabama; Knoxville, Tennessee; and Augusta, Georgia. Fleming calls these cities “hot spots” for loan defect risk getting “hotter,” as the risk in these markets is increasing significantly.The defect risk in each market has increased by a minimum of 10 percent in the past year, and southern markets are experiencing some of the strongest growth in housing demand as people seek the lower cost of living compared to northeastern and western markets, according to Fleming.“Where there’s smoking demand, the flames of defect risk typically follow,” Fleming said.According to First American, the next release of the Loan Application Defect Index will be posted the week of July 24, 2017. Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Brianna Gilpin, Online Editor for MReport and DS News, is a graduate of Texas A&M University where she received her B.A. in Telecommunication Media Studies. Gilpin previously worked at Hearst Media, one of the nation’s leading diversified media and information services companies. To contact Gilpin, email [email protected] Previous: Lowest Home Appreciation in the U.S. Next: The Psychology Behind Why People Buy, And Where The Best Markets For Residential Property Investors 2 days ago Share Save Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Sign up for DS News Daily Subscribelast_img

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