Mortgage application fraud risk rose on a quarterly basis as the purchase share of total applications increased in the second quarter, real estate analytics firm Cotality reported Thursday. The company’s National Mortgage Application Fraud Risk Index gained 11 points, or 9.1%, from the first quarter but was down 4.6% from the second quarter of 2025. Fundamentally, said Matt Seguin, a senior principal covering mortgage fraud solutions for Cotality, surging mortgage rates since the Iran war started in late February may have set the preconditions for an uptick in fraud risk by driving the shift in product mix. Across that dataset, roughly 1 in 119 applications triggered a fraud risk alert. Investor applications triggered risk alerts at roughly three times the rate of typical borrowers, with 1 in 44 applications being flagged.