Cotality says mortgage fraud risk rose 9.1% in Q2

The latest report from Cotality indicating a 9.1% rise in mortgage fraud risk during the second quarter of 2026 is a concerning development for the real estate industry. As purchase lending picks up steam, it's not surprising that fraud risk is increasing, given the higher volume of transactions and the accompanying rise in scrutiny. However, this uptick serves as a reminder for lenders and industry stakeholders to remain vigilant in their monitoring and mitigation efforts.

In the context of a shifting market, with higher mortgage rates dampening refinance activity, lenders may be tempted to loosen their underwriting standards or overlook potential red flags in an effort to maintain or grow their origination volumes. However, as Cotality's findings suggest, such an approach could have serious consequences, including increased exposure to mortgage fraud. As the industry continues to navigate this new landscape, it's essential that stakeholders prioritize robust risk management practices and maintain a commitment to compliance and regulatory adherence.

Looking ahead, it's crucial for industry participants to keep a close eye on emerging trends and adjust their strategies accordingly. As the market continues to evolve, we can expect to see further fluctuations in mortgage fraud risk. To stay ahead of the curve, lenders, servicers, and other stakeholders should focus on enhancing their fraud detection and prevention capabilities, investing in advanced technologies and analytics, and fostering a culture of compliance and risk management. By doing so, they can mitigate potential losses and maintain the trust and confidence of consumers and investors alike.

Originally reported by housingwire.com. ASIDNews adds analysis for real estate & property readers.