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While the performance of the stock market’s been topsy-turvy, the rate of mortgage fraud has dropped.

“The Loan Application Defect Index increased for the first time in 15 months, rising 1.6% in May relative to one month ago. Both refinance and purchase loan fraud risk increased as the coronavirus pandemic continued to impact the mortgage market,” said First American Deputy Chief Economist Odeta Kushi.

In the first four weeks June, she continued, the 30-year fixed averaged 3.33% APR—just below May’s 3.37% average and April’s, 3.36%. The June rate average was the lowest in NerdWallet’s daily rate survey’s four-year history.

On a yearly basis, Augusta, Georgia, was -33%, followed by Provo, Utah, 32.9% and South Carolina, 30.3%.

Kushi said employment and income fraud, which parachuted 10 and 7%, respectively, compared to last month, are the two primary drivers of the hike in fraud risk. This represents the first monthly hike in employment risk since October 2019.

“Higher income and employment fraud risk is likely a result of applicants, whose job and income may be affected by the pandemic’s impact on the economy, attempting to hide that impact from the lender,” she said.

She continued, saying an economic downturn can pressure home buyers to misrepresent information on a loan application in order to qualify for financing. “The competitive home-buying market may also influence home buyers to misrepresent information in their loan applications to be more competitive when bidding for a home, creating an environment ripe for accelerating fraud risk.”

In April, mortgage application fraud sagged 8.9% from Q4 2019 to Q1 2020, as reported by CoreLogic. From Q1 2019, reported mortgage applications fraud retreated 26.6% annually. The risk level closely mirrors the time of the last significant refinance boom, in Q3 2016.

Interestingly, despite the 11% drop in fraud compared to Q4 2019, the metro of Miami-Fort Lauderdale-West Palm Beach had the nation’s highest fraud risk. That was followed by Deltona-Daytona Beach-Ormond Beach, which reported a month-over-month increase of 21%.

Furthermore, during Q1 2020, Florida, New York, and Nevada also contributed to an uptick in investment purchase risk.

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