Mortgage Loan Defect Incident Rises

 SANTA ANA, CA—Insurance provider First American Financial Corporation has released its First American Loan Application Defect Index for July 2015, which estimates the frequency of defects in the information submitted in mortgage loan applications. The Defect Index reflects estimated mortgage loan defect rates over time, by geography and by loan type. It’s available as an interactive tool that can be tailored to showcase trends by category.

The Defect Index rose 4.9% in July as compared with June and decreased by 5.6% as compared with July 2014. The Defect Index, which reflects estimated mortgage loan defect rates over time, by geography and by loan type, is down 17.5% from the high point of risk in September 2013. After improving last month, the Defect Index worsened month-over-month, following the pronounced year-to-date trend, which has the Index up 10.4%. The frequency of loan application defects had shown a consistent downward trend since the peak in 2013 until the beginning of 2015.