A report that measures the risk of fraud on home-loan applications says that risk on loans with adjustable rates is lower than on fixed-rate mortgages. The report indicated a year-over-year rise in overall risk.
An estimate of the level of defects, fraud and misrepresentation detected in the information submitted in mortgage applications, the Loan Application Defect Index, was 83 as of February.
Compared to the preceding month, the index — which was benchmarked to a value of 100 as of January 2011 — was unchanged. But a more than 9 percent increase was recorded versus a year previous.
Source: Mortgage Daily