SANTA ANA, CA—First American Financial Corporation, a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, today released the First American Loan Application Defect Index for October 2015, which estimates the frequency of defects, fraudulence and misrepresentation 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, including amortization type, lien position, loan purpose, property and transaction types, as well as state and market comparisons of mortgage loan defect levels.

The Index fell 2.5% in October as compared with September and decreased by 10.2% as compared with October 2014. The Defect Index, which reflects estimated mortgage loan defect rates over time, by geography and by loan type, is down 22.3% from the high point of risk in October 2013.

This is the third month-over-month decline in a row of defect and misrepresentation risk, returning the Defect Index to the level of April 2015 and reversing the upward trend in the first half of the year. The Defect Index has fallen more than six percent over the last three months. The index is up 1.3% from the low point for defect risk set in March 2015, yet remains well below the level of defect risk observed throughout most of the historical series.