First American's Loan Application Defect Index revealed that the pace of mortgage fraud risk declined for December 2019. The Loan Application Defect Index is designed to estimate the frequency of defects, fraudulences and misrepresentation in information on mortgage application submissions, according to Yahoo Finance.
"The frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications decreased by 1.5 percent compared with the previous month," according to the report.
It also revealed that when compared to November 2018, December 2019's Defect Index decreased by 16 percent. When compared to October 2013, the Defect Index is a whopping 34.3 percent lower as of December 2019.
"For the majority of 2019, overall fraud risk steadily declined, largely due to the rising volume of lower risk refinance transactions driven by low mortgage rates. After falling since March, overall defect risk stabilized in November, and then declined again in December," said Mark Fleming, chief economist at First American, according to the report. "The overall Defect Index, which includes both purchase and refinance transactions, fell 1.5 percent compared with November, and is 23 percent lower than one year ago."
To learn more about First American's Loan Application Defect Index, click here.