The frequency of defects, fraud and misrepresentation in mortgage loan applications decreased 7 percent in June compared with the previous month, according to the First American Loan Application Defect Index.
However, year-over-year defects in June increased by 3.9 percent compared with June 2018, First American said.
“This month, the Loan Application Defect Index for purchase transactions continued its downward trend, declining 7.8 percent in June compared with the month before, the third consecutive month defect risk in purchase transactions has fallen,” First American Chief Economist Mark Fleming said in a release.
According to the index, four of the top six spots among the top cities where fraud risk declined the most on an annual basis were in Florida, including Jacksonville (-15.1 percent); Tampa (-11.5 percent); Orlando (-11.1 percent); and Miami (-7.3 percent).
“This is a deviation from the norm, as Florida has historically exhibited a relatively greater concentration of fraud risk due to some characteristics of the Florida housing market,” Fleming said. “Florida tends to have a higher percentage of investor-owned properties, which have a higher propensity for fraud risk.”
First American said the five states with the greatest year-over-year decreases in defect frequency in June were Arkansas (-10.3 percent); Florida (-6.7 percent); Vermont (-5.1 percent); Utah (-4.8 percent); and Arizona (-4 percent).
The five states with the greatest year-over-year increases in defect frequency in June were Nebraska (+34.8 percent); Iowa (+25.7 percent); New York (+25.3 percent); Pennsylvania (+19.7 percent); and Rhode Island (+19.1 percent).