We’ve posted the April First American Loan Application Defect Index, which estimates the frequency of defects, fraudulence and misrepresentation in the information submitted in mortgage loan applications. The Defect Index increased 2.5 percent in April 2017 as compared with the previous month, and increased 8.0 percent as compared to April 2016. The Defect Index is down 20.6 percent from the high point of risk in October 2013.

“The Loan Application Defect Index continued its strong upward increase for the fifth consecutive month,” said Mark Fleming, chief economist at First American. “The pace of defect risk growth is as strong as we have seen since the index began in 2011, adding to the concern over the five-month trend. While we have recently noted that part of the rise in overall risk is due to the market’s shift toward riskier purchase transactions, the fact that risk in refinance transactions is also on the rise underscores the need for caution.”

For this information, the top five states and markets where defect risk is increasing or decreasing, and more, please visit the Loan Application Defect Index.

“The fact that risk in refinance transactions is also on the rise underscores the need for caution.”