As interest rates continue to lower and home values rise, mortgage fraud application risk has fallen 8.9 percent from the second quarter of 2014 to the second quarter of 2015, according to CoreLogic's October 2015 Mortgage Fraud Report. 
The Mortgage Application Fraud Risk Index showed that approximately 12,814 of mortgage applications, or 0.67 percent, contained fraud in the second quarter of 2015. Last year, during the same time, 11,100 mortgage applications, or 0.69 percent, contained indications of fraud.
The index calculates fraud risk based on the share of loan application with a high risk of fraud. The index is standardized to a baseline of 100 for the share of high-risk loan applications nationally in the third quarter of 2010. Each one point change represents a 1 percent change in the share of mortgage applications have a high risk of fraud.
CoreLogic points out two factors that are affecting declining fraud risk rate: interest rates and home values.
Declining interest rates from 2013 through April 2015 are welcoming more qualified buyers in the refinance market and lowering mortgage fraud risk. In addition, higher home values are adding equity to homes, which allows homeowners with previously marginal equity to purchase a new property, refinance, or obtain a home equity loan.
Susan Allen, SVP, Mortgage Analytics at CoreLogic noted that "although overall fraud trends are stable to decreasing for most of the country some geographies warrant scrutiny."
The Miami, Florida metro currently ranked number one in terms of mortgage fraud risk, with an index of 339, down 9.1 percent year-over-year and down 2.9 percent quarter-over-quarter.
"One such area is the Miami CBSA, which ranks atop the CoreLogic fraud list of metropolitan areas. Of particular concern is that house prices in Miami appear to be overheated, as indicated by the CoreLogic Market Condition Indicators. Moreover, house prices in the Miami CBSA have been accelerating at a far greater pace than have rents for single family homes, suggesting that prices may not be a good indicator of sustainable value. This combination of risk factors makes areas like Miami worth paying attention to."
Tampa, Florida; Orlando, Florida; North Port, Florida; and New York City, New York wrapped up the top five metro areas with the highest risk indices.
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