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Press release from PR Newswire

CoreLogic® Estimates $7.4 Billion in Fraudulent Mortgage Originations for 2011

Thursday, September 29, 2011

CoreLogic® Estimates $7.4 Billion in Fraudulent Mortgage Originations for 201109:00 EDT Thursday, September 29, 2011Property Specific Fraud Risk Increased 262 Percent in 2010SANTA ANA, Calif., Sept. 29, 2011 /PRNewswire/ -- CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today announced the availability of its 2011 Mortgage Fraud Trends Report. The study analyzed 10.5 million loan applications from the first quarter of 2005 through the first quarter of 2011. In the report, CoreLogic fraud experts predict that fraud-related U.S. residential mortgage originations will total $7.4 billion in 2011. This represents a nearly 40 percent decline from the estimated $12 billion in mortgage fraud-related originations experienced by the industry in 2010. The study also revealed the ever-changing nature of fraud with certain types on the rise including property fraud (262 percent increase over last year) and others on the decline such as identity fraud (45 percent decrease over last year). (Logo: http://photos.prnewswire.com/prnh/20100609/CLLOGO)CoreLogic attributes the year-over-year decrease primarily to significantly lower mortgage origination volume in 2011 combined with the CoreLogic Fraud Index remaining relatively flat for the last five consecutive quarters of the study period.  This indicates that lenders' improved pre-funding fraud controls have curbed the fraud growth that spiked in 2007."Although our data shows the overall fraud rate has been relatively flat over the last few quarters, new fraud schemes are constantly evolving to infiltrate weaknesses and vulnerabilities in lenders' fraud prevention programs," stated Tim Grace, senior vice president of Product Management and Analytics at CoreLogic.  "To address this, we developed an Alert Risk Index approach to evaluate the movement in individual fraud types and to observe additional risk patterns. For example, the study shows that the primary reason for the increase in property fraud risk is related to potential fraudulent flipping and flopping of properties. As fraud trends change, CoreLogic can examine the consequent change in fraudsters' patterns generated each day based on newly originated loans."The Federal Bureau of Investigation concurs that the opportunity for mortgage fraud will continue. It stated in its 2010 Mortgage Fraud Report, "The current and continuing depressed housing market will likely remain an attractive environment for mortgage fraud perpetrators who will continue to see new methods to circumvent loopholes and gaps in the mortgage lending market. These methods will likely remain effective in the near term, as the housing market is anticipated to remain stagnant through 2011."  A copy of the 2011 Mortgage Fraud Trends Report can be found at http://www.corelogic.com/about-us/researchtrends/mortgage-fraud-research-report.aspxAdditional highlights of the study include:The five riskiest areas of the country for fraud-related originations based on the first three digits of the ZIP code are Chicago, IL (606); Washington, D.C. (201); Brooklyn, NY (112); Atlanta, GA (303) and Jamaica, NY (114). These five riskiest Sectional Control Facilities (SCFs) are determined using the Fraud Index where each has a fraud rate that is at least 30 percent higher than the national average for mortgage fraud risk. The Fraud Index is a leading indicator that validates our previously published findings (based on lender-reported confirmed frauds) as there is significant overlap between riskiest SCFs determined by the Fraud Index and by confirmed fraud reports.The CoreLogic Fraud Index remained flat from the first quarter 2010 through the first quarter of 2011, declining more than 28 percent since its peak in the third quarter of 2007. The Fraud Index represents the collective level of fraud risk the industry was experiencing each quarter.CoreLogic has introduced Alert Risk Indices. Although the overall Fraud Index remains flat, the Alert Risk Indices allow us to understand the trends of the individual fraud types, as seen below.  Fraud Alert Type1Q 2009 compared to 1Q 2010Year-Over-Year Growth/Decline1Q 2010 compared to 1Q 2011Year-Over-Year Growth/DeclineProperty4%262%Undisclosed Debt68%19%Identity7%-45%Occupancy-28%11%Employment-2%-11%Income-14%0%About CoreLogicCoreLogic (NYSE: CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. The company, headquartered in Santa Ana, Calif., has more than 6,500 employees globally with 2010 revenues of $1.6 billion. For more information visit www.corelogic.com.CoreLogic is a registered trademark of CoreLogic.SOURCE CoreLogicFor further information: Media, Alyson Austin, Corporate Communications, +1-714-250-6180, newsmedia@corelogic.com, or Investors, Dan Smith, Investor Relations, +1-703-610-5410, investor@corelogic.com, both of CoreLogic; or Trade Media, Gina Ray, PowerMark Group, +1-949-370-0941, gray@thepowermarkgroup.com