A purchase-heavy market raised mortgage fraud risk in the second quarter, with the distribution of applications opening the door for unlawful activity, a new report said. The company's fraud risk index jumped 11 points to a reading of 132, with one in every 119 mortgage applications containing a potential lending defect or flaw. An economic environment that has run counter to expectations this year is behind much of the index rise, according to Matt Seguin, senior principal at Cotality mortgage fraud solutions. Purchase transactions typically carry greater fraud risk than refinances, Seguin pointed out. Purchase loans are the opposite and generally require those documents, which leads to more opportunities for mortgage fraud," he said.