"Investment and multifamily loans remained the highest-risk categories, according to the data. An estimated one in 43 investment property applications and one in 27 multifamily applications showed signs of fraud risk during the quarter, well above the broader industry average. The percentage ofrefinancesin the Cotality data set has increased year-over-year by19%, yetthe fraud index is up 1.5% over that time."
"The two riskiest segments of the fraud index, investment properties (+34%) andmulti-unit properties (50%), have jumped significantly over the last year as a portion of the overall application volume seen by Cotality. The increase in volume in these two segmentshas led to a slight increase in the Fraud Risk Index. This change seems to have been driven, at least partially, by the surge in popularity of the DSCR loans."
"The real estate-related fraud risk category recorded the largest year-over-year increase in the fourth quarter, up 8.6%, which Cotality attributed to increased investment property activity. Over the past three months, non-owner-occupied properties triggered undisclosed real estate alerts at more than 2.5 times the rate of owner-occupied homes, the company said. Such risks can include undisclosed debt, misrepresentation of occupancy or adverse credit events not identified during underwriting."
Investment and multifamily loans showed the highest fraud risk, with one in 43 investment applications and one in 27 multifamily applications exhibiting fraud indicators. Refinance share in the Cotality dataset rose 19% year-over-year while the overall fraud index increased 1.5%. Investment properties (+34%) and multi-unit properties (50%) expanded as portions of application volume and contributed to a modest rise in the Fraud Risk Index. DSCR loans helped drive that shift. Real-estate-related fraud risk rose 8.6% year-over-year. Non-owner-occupied properties triggered undisclosed real estate alerts at more than 2.5 times the rate of owner-occupied homes. Income, property, and occupancy predictive alerts also increased.
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