Is your ZIP a loan-fraud “hot spot”?

by Marilyn Kalfus

As part of a nationwide analysis, CoreLogic has identified parts of Orange County where their data reflects some mortgage fraud occurred between 2005 and 2009. These rates are compared to a national average of 0.55%:

I asked the folks at CoreLogic about their use of the term ‘hot spots” in light of the statistics. Not to make light of any type of fraud, but even in the O.C. ZIP that they cited as the worst, Fullerton’s 92832, the fraud rate was 1.55% — obviously a very small percentage of loans.

Tim Grace, senior VP of Fraud Analytics at CoreLogic, responded:

“Yes, 1.55% is a seemingly small amount when considered by itself, but what matters is the relative comparison to the national average (0.55%) as well as the Orange County average (0.45%). The Fullerton ZIP code (92832) has an observed fraud rate almost 3X the national average and 4X the Orange County average — it is the most significant ‘hot spot’ for mortgage fraud in Orange County (with Garden Grove (92843) close on its heels at 1.53%).”

As to how the study was conducted, Grace said, “The statistics reported are based on actual reports from lenders (as opposed to a sampling / extrapolation method) regarding non-fraudulent and fraudulent loans.”

More findings from the report in upcoming posts. We’re also seeing if we can get dollar amounts.

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