We see many prospective applicants that walk in and think they have no chance of getting approved for a home loan, but nothing could be farther from the truth.
Chicago, IL (PRWEB) October 04, 2013
The Federal Savings Bank has been informing its mortgage applicants that due to a recent decline in the volume of mortgage fraud, credit standards by lenders are falling, which is great for first-time homebuyers. Mortgage fraud has always been an issue within the lending industry, but this recent data shows that trends are changing. According to CoreLogic, mortgage fraud concerning property information fell during the second quarter of 2013 while fraud involving income information increased.
According to CoreLogic's September 25th Mortgage Fraud Report, application fraud was down overall during the second quarter, with property-related fraud decreasing by one-fifth since the same time last year. The rise in income-related fraud over property information is attributed to rising home prices, which has made the need to lie about property worth unnecessary.
"As the housing market and economy have healed over the last 18 months, a transition away from property-related to income-related application fraud has occurred," said Mark Fleming, chief economist at CoreLogic. "Rising prices and a healing housing market make property-related mortgage application fraud less likely, but a higher level of scrutiny on an individuals' ability to pay increases the propensity to attempt income-related fraud."
Figures show that nearly 19,700 mortgage applications filed during the second quarter had some risk of fraud, down 0.7 percent from the previous year. However, even while mortgage application fraud is decreasing, the rising price of homes has resulted in a higher dollar amount concerning fraud.
"While the propensity toward application fraud risk has declined based on our index, as the housing market recovers, the volume of mortgage applications is rising and increasing the total amount of fraudulent mortgage loan application dollars," Fleming said.
Much of the income-based fraud can be attributed to mortgage borrowers hoping to qualify for loans that may feature more stringent restrictions by lying about their finances. However, there are many loan options available to eligible borrowers that feature more lenient qualifying standards.
“We see many prospective applicants that walk in and think they have no chance of getting approved for a home loan, but nothing could be farther from the truth” says Nick, a banker at The Federal Savings Bank.
FHA mortgages, for instance, are particularly popular with first-time homebuyers who may have less established credit histories. VA loans also tend to be easier to obtain for former service members and their spouses.
Contact The Federal Savings Bank to discuss different loan options, as well as how to qualify for them.