Legal actions on mortgage fraud cases fell to a post-crisis low in 2013’s third quarter, Mortgage Daily reported in its quarterly Mortgage Fraud Index.
The index, which tracks motions and decisions on cases in which lenders are given false information for the loan decision process, was 655 in Q3, the lowest value since the fourth quarter of 2007.
The number of tracked cases retreated to 91, while total of estimated loan amounts came to $1.1 billion—the lowest in nearly three years. Both the number of cases and dollar amount involved are factored into the index.
According to Mortgage Daily founder Sam Garcia, the improvement in the index reflects greater quality control and increased fraud prevention efforts.
“As mortgage bankers have been hit with a tidal wave of repurchase demands on agency mortgages, they have taken steps to reduce risk on new originations,” Garcia said.
Preliminary fourth-quarter data suggest another fall in the next report, owing partly to the government shutdown slowing prosecution activity, he added.
Despite the overall decline, certain states remain hot spots for fraud. According to the site, California had the highest third-quarter index value, and Nevada’s index climbed again, marking a full year of increasing activity.