The Hudson Valley area encompassing Poughkeepsie, Newburgh and Middletown has topped a new national ranking of metro areas for mortgage fraud risk.
In new data released by CoreLogic, New York was cited as the leading state for mortgage fraud risk during the second quarter, with the Poughkeepsie-Newburgh-Middletown market scoring a 200-point level on the CoreLogic Risk Index. The New York City metropolitan area placed seventh in the CoreLogic rankings with a Risk Index reading of 144. Across the border, Connecticut ranked as the sixth leading state for mortgage fraud risk thanks to high Risk Index placements for the New Haven-Milford market (17th place) and the Bridgeport-Norwalk-Stamford corridor (19th place).
While CoreLogic offered no specific explanation on why mortgage fraud risk was so high in the Hudson Valley region, it observed that mortgage fraud risk was declining on a national basis: an estimated 0.61% of all mortgage applications, or roughly one in 164 applications, contained fraud in the second quarter of this year, compared to the second quarter of 2019 when 0.81%, or about one in 123 applications, were laced with fraud.
“Investment loan applications are showing a higher risk because real estate investors have a profit motivation for their activity,” said Brigid Berg, principal for fraud solutions at CoreLogic. “This introduces other factors and increases the risk compared to a purchase for personal use. Investors often own other real estate and are more likely to have undisclosed ownership and transactions in process.”
Berg added that VA loans had the lowest risk for fraud “because they are restricted to a select group of borrowers and are for personal occupancy, except for certain refis. This makes identity issues and straw buyer situations rare. Many VA borrowers are employed by the military, reducing income risk also.”
