Purchase/Refi Split and National Fraud Trends
Purchase transactions generally have higher risk than refinances, due to complex motivations, greater urgency, and more interested parties.
The decrease in the risk index in 2020 coincides with low interest rates in the pandemic, which resulted in a surge in low-risk rate-reduction refinances. The index had a sharp increase as rates increased and there were fewer low-risk loans. The last two years have had stable risk.
Risk Overview
Continued high interest rates have continued to keep volumes in check. The refinance share within our consortium has barely moved, staying between 24% and 27.5% for the last 9 quarters (since mid-2022).
To analyze the national index, we trend the risk levels and volumes of distinguishing loan segments. Year-over-year the overall index was fairly stable, but there were interesting changes within the distinguishing segments.
Refinance shares stayed between
AND
SINCE MID-2022 (9 quarters)
❝The stability in the volumes of loans as well as the types of transactions over the last two years is reflected in the relative steadiness of the aggregated National Mortgage Fraud Index. Fluctuations in the index are indicative of small changes in loan segments rather than large shifts in the lending environment.❞
~ Josh Wilson, CoreLogic Primary Fraud Risk Modeler, Science and Analytics
In last year’s report, we saw a large volume shift from conforming purchases to FHA purchases. Those relative volumes for conventional and FHA held steady this year.
Purchase transactions as a share of overall volume were
IN Q2 2023
and were nearly unchanged at
IN Q2 2024
Purchase segments showed higher risk than refinances.
Segments with the most significant risk increases
Investment purchases and Investment refinance
FHA purchases & jumbo purchases
2- to 4- unit purchases
Purchase transactions as a share of overall volume were
IN Q2 2023
and were nearly unchanged at
IN Q2 2024
Purchase segments showed higher risk than refinances.
BACK-UP - To revert to older version
This is not part of the design - just a note
In last year’s report, we saw a large volume shift from conforming purchases to FHA purchases. Those relative volumes for conventional and FHA held steady this year.
Segments with greatest risk increases
Invesment purchases and Investment refis
FHA purchases & jumbo purchases
2- to 4- unit
purchases
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