Mortgage Defaults Up!

Mortgage Loan Defaults On The Rise!

A new study has found that up to 70% of mortgage early payment defaults and can be linked to a significant misrepresentation on the original loan application.

The purpose of the study was to investigate the link between fraud and payment trends during the early life of the loan. The result of the study concluded that loans that contained egregious misrepresentations were up to 5 times more likely to default in the first six months than loans that did not.

“Many lenders are facing increases in repurchase requests and early payment defaults. The cost of mortgage fraud is borne by every person or family who buys or sells a home.

The studies showed 16,000 loans that were confirmed to contain egregious misrepresentations in the loan file that later led to a default. These misrepresentations included fraud such as: income inflated by as much as 500%, appraisals that overvalued the property by 50% or more, fictitious employers and