Low interest rates and better loan processing have produced the lowest national level of loan defect and misrepresentation in the recent past, according to First American Financial Corp. The financial firm's Loan Application Defect Index shows defect and fraudulent information submitted on loan applications dropped 2.8 percent from June to July, and 16.7 percent from July 2015. The index detects and tracks the frequency of fraudulent, defect and misrepresentation in mortgage loans. Aside from the brief period between October 2012 and January 2013, mortgage rates are at the lowest point since Freddie Mac has been tracking since 1971, the index shows. First American reports that the defect index is improving as refinance activity continues strengthening in the market. Refinance transactions have also decreased over the month and year. Currently, refinance transactions in the index are 1.7 percent lower than the previous month and 18.1 percent lower than July 2015, Firs...
- The First American Loan Application Defect Index showed defects, fraudulence and misrepresentation on loan applications across the U.S. declined 16.7 percent year-over-year.
- Affordable housing and income growth in the South has attracted more buyers, which has elevated the risk factors due to increased demand.
- San Francisco's Defect Index decreased 18.99 percent year-over-year, to 64. There has been steady decline over the summer, with a 1.54 percent decrease month-over-month in July.