How Could Gig Work and Automation Lead to More Mortgage Fraud?

Instances of mortgage fraud have remained relatively stable in recent years. In the second quarter of 2023, CoreLogic estimates that 1 in 134 applications contained fraud, up from 1 in 131 during the same period in 2022. But that doesn’t mean that lenders shouldn’t be on the lookout for warning signs.

In the 2023 Mortgage Fraud Report, researchers found that suspected occupancy loans have nearly tripled since 2020. This type of fraud, which is difficult to spot during origination, typically occurs when someone identifies an investment property as a primary residence to obtain more favorable rates. Not only is this subcategory of fraud requiring more attention, but a changing economy and the increase in automation is bringing unique challenges to the industry.

In this episode, host Maiclaire Bolton Smith sits down with Bridget Berg, a senior leader in loan solutions at CoreLogic, to talk about who ends up paying when someone defaults on a loan and how automation may open the door for increased fraud.

In This Episode:

0:53 – Who ends up paying when someone default on a loan that has fraud and what happens to lenders that have to buy back loans?

4:10 – Does the normalization of automated underwriting have the potential to lead to more mortgage fraud?

6:30 – Are cash-based borrowers without traditional credit histories turning mortgage fraud more of a concern?

9:07 – Erika Stanley gives an overview of natural disaster headlines from CoreLogic's Hazard HQ Command Central.

10:58 – What does the future of fraud risk look like.

Links:

• Why Extreme Heat-Related Property Risk Is the Next Significant Business Hurdle
• Hazard HQ Command Central Natural Disaster Coverage
• 2023 Mortgage Fraud Report
• October 2023 U.S. Home Price Insights Report

Up Next: HELOC Loans May Be the Next Threat for Mortgage Fraud

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