The frequency of defects, fraud and misrepresentation in mortgage loan applications increased by 7.4 percent during December, according to the First American Loan Application Defect Index.
The index increased by 4.8 percent year-over-year compared with December 2017, and declined 14.7 percent from the high point of risk in October 2013.
“In December 2018, the Loan Application Defect Index for purchase transactions continued its string of month-over-month increases, rising for the fourth month in a row,” First American Chief Economist Mark Fleming said in a release. “Despite the upswing, the Defect Index for purchase transactions still remains 1.1 percent below its level in December 2017.
“The Defect Index for refinance transactions also increased 8.2 percent compared to the previous month and is 14.5 percent higher than a year ago,” Fleming said.
According to the index, the states with largest year-over-year increases in defect frequency in December were Alaska (+32.9 percent), West Virginia (+31.5 percent), Maine (+26.1 percent), New York (+24.7 percent), and Hawaii (+21.1 percent).
The states with the greatest year-over-year decreases in defect frequency in December were Vermont (-17.4 percent), Florida (-11.1 percent), Arizona (-8.2 percent), Arkansas (-7.6 percent), and Minnesota (-7.3 percent), the index found.
The metropolitan areas with the greatest year-over-year increases in defect frequency in December were San Diego (+30.1 percent); Pittsburgh (+24.6 percent); Richmond, Va. (+23.2 percent); Detroit (+21.3 percent); and Memphis, Tenn. (+20.5 percent).
The metropolitan areas with the largest year-over-year decreases in defect frequency in December were Jacksonville, Fla. (-17.2 percent); Houston (-16.5 percent); Tampa, Fla. (-13.5 percent); Orlando, Fla. (-10.3 percent); and Minneapolis (-10.1 percent).