“The mortgage finance industry’s significant investment in financial technology to deliver a convenient, digital, highly automated and all-around better home-buying experience has also enhanced the mortgage manufacturing and underwriting process, producing declining levels of defect risk,” said Fleming. “The benefits of this investment are not geographically specific, so it’s no surprise that we see the impact of this investment in the vast majority of markets. The question is not where is defect risk declining, but when will it stop?”
July 2018 State Highlights
There are two states with a year-over-year increase in defect frequency: Maine (+1.4 percent) and Hawaii (+1.1 percent).
The five states with the greatest year-over-year decrease in defect frequency are: South Carolina (-24.7 percent), Minnesota (-20.7 percent), Alabama (-20.0 percent), Vermont (-19.8 percent), and North Dakota (-18.6 percent).
July 2018 Local Market Highlights
Among the largest 50 Core Based Statistical Areas (CBSAs), the five markets with the greatest year-over-year increase in defect frequency are: Virginia Beach, Va. (+12.8 percent), Los Angeles (+10.8 percent), Orlando, Fla. (+9.6 percent), San Diego (+4.9 percent), and Memphis, Tenn. (+2.6 percent).
Among the largest 50 Core Based Statistical Areas (CBSAs), the five markets with the largest year-over-year decrease in defect frequency are: Birmingham, Ala. (-27.3 percent), Raleigh, N.C. (-24.7 percent), Minneapolis (-23.3 percent), Boston (-19.5 percent), and Austin, Texas (-19.0 percent).
Next Release
The next release of the First American Loan Application Defect Index will take place the week of September 24, 2018.
Methodology