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Defect Risk Declines for the First Time in Eight Months, According to First American’s Loan Application Defect Index



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—The future of fraud and misrepresentation risk is tied closely to
mortgage rates, says Chief Economist Mark Fleming—

American Financial Corporation
(NYSE: FAF), a leading
global provider of title insurance, settlement services and risk
solutions for real estate transactions, today released the First
American Loan Application Defect Index
for April 2019, which
estimates the frequency of defects, fraudulence and misrepresentation in
the information submitted in mortgage loan applications. The Defect
Index reflects estimated mortgage loan defect rates over time, by
geography and loan type. It is available as an interactive
that can be tailored to showcase trends by category, including
amortization type, lien position, loan purpose, property and transaction
types, and can provide state- and market-specific comparisons of
mortgage loan defect levels.

April 2019 Loan Application Defect Index

  • The frequency of defects, fraudulence and misrepresentation in the
    information submitted in mortgage loan applications decreased by 4.2
    percent compared with the previous month.
  • Compared to April 2018, the Defect Index increased by 11.0 percent.
  • The Defect Index is down 10.8 percent from the high point of risk in
    October 2013.
  • The Defect Index for refinance transactions decreased by 3.5 percent
    compared with previous month, and is up 16.9 percent compared with a
    year ago.
  • The Defect Index for purchase transactions decreased by 4.0 percent
    compared with the previous month, and is up 10.3 percent compared with
    a year ago.

Chief Economist Analysis: Lower Mortgage Rates Help Break Defect Risk

“The frequency of defects, fraudulence and misrepresentation in the
information submitted in mortgage loan applications declined 4.2 percent
compared to last month. Notably, this marks the first month-over-month
decline since July 2018, thanks to lower mortgage rates,” said Mark
Fleming, chief economist at First American. “Decreasing mortgage rates
contributed to an increase in inventory, reducing the competitive
pressure on the housing market, as well as contributing to an increase
in lower-risk refinance transactions. In line with this trend, the Loan
Application Defect Index
for purchase transactions declined for the
first time in eight months, falling 4.0 percent in April compared with
the previous month.

“The two competing trends that resulted in a flat fraud risk last month
were the increasing share of less risky refinance transactions working
to decrease overall fraud risk, and the continuation of the hot sellers’
market, motivating buyers to misrepresent information in order to
qualify for a bigger mortgage and increase overall fraud risk,” said

“The mix of refinance and purchase activity fluctuated within the month
of April. Refinance
activity increased
in the first half of the month as mortgage rates
declined. However, lower mortgage rates also fueled an increase in
purchase transactions, as buyers took advantage of their increased
house-buying power,” said Fleming. “In fact, purchase
applications hit their highest level in nine years
towards the end
of April. While loan application defects can happen on both purchase or
refinance transactions, there is a higher propensity for fraud and
misrepresentation with purchase transactions.

Increased Inventory Cools Misrepresentation Pressure

“However, the decline in mortgage rates had a third and even more
important consequence, which was to help alleviate some of the supply
constraints that made the housing market so competitive,” said Fleming.
“As we saw in last
month’s report
, in extremely competitive markets, there is more
motivation to misrepresent information on a loan application to qualify
for the bigger mortgage in order to win the bidding war.

“Most recently, real estate agents indicate that their buyers
are encouraged by an unexpected surge of supply
. April did see an increase
in total housing inventory
, rising to 1.83 million from 1.67 million
in March, which is a 1.7% increase year-over-year. Potential buyers feel
less inclined to misrepresent information on a loan application when
they don’t feel the pressure of a hot sellers’ market. Indeed,
misrepresentation of income and employment both fell this month, by 1.7
percent and 3.6 percent respectively,” said Fleming.

“The future of fraud and misrepresentation risk is tied closely to
mortgage rates. Increased inventory reduces competitive pressures and
misrepresentation risk, alongside the rising share of lower-risk
refinance transactions,” said Fleming. “It remains to be seen if
mortgage rates, now flirting with 4 percent, will go any lower. If so,
we may anticipate the continued downward trend in defect risk and
misrepresentation, with further increases in refinance transactions and
inventory, resulting in less pressure on the market.”

April 2019 State Highlights

  • The five states with a year-over-year increase in defect frequency
    are: New York (+37.3 percent), Nebraska (+37.0 percent), Iowa (+35.0
    percent), Hawaii (+33.7 percent), and West Virginia (+31.1 percent).
  • There are two states with the year-over-year decrease in defect
    frequency: Arkansas (-4.8 percent) and Florida (-1.1 percent).

April 2019 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: Buffalo, N.Y. (+36.9 percent), Pittsburgh (+31.3 percent),
    Richmond, Va. (+30.1 percent), Cincinnati (+29.3 percent), and New
    York (+26.3 percent).
  • Among the largest 50 Core Based Statistical Areas (CBSAs), the five
    markets with year-over-year decrease in defect frequency are:
    Jacksonville, Fla. (-11.6 percent), Houston (-8.5 percent), Orlando,
    Fla. (-7.4 percent), San Diego (-4.3 percent), and Miami (-2.0

Next Release

The next release of the First American Loan Application Defect Index
will take place the week of June 24, 2019.


The methodology statement for the First American Loan Application Defect
Index is available at


Opinions, estimates, forecasts and other views contained in this page
are those of First American’s chief economist, do not necessarily
represent the views of First American or its management, should not be
construed as indicating First American’s business prospects or expected
results, and are subject to change without notice. Although the First
American Economics team attempts to provide reliable, useful
information, it does not guarantee that the information is accurate,
current or suitable for any particular purpose. © 2019 by First
American. Information from this page may be used with proper attribution.

About First American

First American Financial Corporation (NYSE: FAF) is a leading
provider of title insurance, settlement services and risk solutions for
real estate transactions that traces its heritage back to 1889. First
American also provides title plant management services; title and other
real property records and images; valuation products and services; home
warranty products; property and casualty insurance; banking, trust and
wealth management services; and other related products and services.
With total revenue of $5.7 billion in 2018, the company offers its
products and services directly and through its agents throughout the
United States and abroad. In 2019, First American was named to the Fortune 100
Best Companies to Work For® list for the fourth consecutive
year. More information about the company can be found at


Marcus Ginnaty
Corporate Communications
First American
Financial Corporation
(714) 250-3298


Oppenheimer & Co. To Host 19th Annual Consumer Growth and E-Commerce Conference



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Oppenheimer & Co. Inc. (“Oppenheimer”) – a leading investment bank, wealth manager, and a subsidiary of Oppenheimer Holdings (NYSE: OPY) – will host its 19th Annual Consumer Growth and E-Commerce Conference on June 18-19 in Boston, MA. This year’s event features companies from prominent consumer brands such as Autozone, Domino’s Pizza, Express, Home Depot, Lowe’s, Six Flags Theme Parks, Tiffany & Company, Ulta, Walmart, Weight Watchers, and Yum Brands.

Of particular note, Oppenheimer is pleased to host nine of the market-leading companies involved with emerging trends in the Cannabis space this year. The event will also feature seven panel discussions, moderated by Oppenheimer Consumer Research Analysts, addressing emerging and disruptive trends in the consumer marketplace as follows:

  • Evolving Role of Technology in the Consumer Sector with Cooler Screens and Lindsay Goldberg LLC, moderated by Brian Nagel
  • A Discussion with Emerging Restaurant Brands with Aurify and B. Good, moderated by Brian Bittner
  • A Discussion on the Evolving US Food & Beverage Landscape with Lifeway, New Age Beverage, and United Natural Foods, moderated by Rupesh Parikh
  • Next Gen Brands Re-Shaping Landscape for Women’s Fashion with CARAA and Rothy’s, moderated by Brian Nagel
  • Exciting New Brands Shaking Up Home Products Space with Burkelman, LoveSac and Resident/Nectar, moderated by Brian Nagel
  • A Discussion on the Emerging CBD Landscape with Curaleaf and CV Sciences, moderated by Rupesh Parikh
  • Leveraging the Power of Digital to Connect with Consumers with Eight and FlexShopper, moderated by Brian Nagel

The conference features Oppenheimer’s Consumer Senior Research Analysts:

  • Brian Bittner, Managing Director Senior Analyst covering Restaurants
  • Brian Nagel, Managing Director and Senior Analyst covering Retail and E-Commerce
  • Rupesh Parikh, Managing Director and Senior Analyst covering Food, Grocery and Consumer Products
  • Ian Zaffino, Managing Director and Senior Analyst covering event-driven Special Situations

“Long-established business models are being upended by disruptive brands and technology, affecting consumer preferences and buying behaviors throughout the consumer industry. This year’s event aims to showcase the mix of market-leading and emerging companies driving and navigating these changes,” said Erica L. Moffett, Managing Director and Associate Director of Research at Oppenheimer. “From effortless payment methods to accelerated delivery times and customized products, consumers want a seamless experience. In order to succeed, companies must stay current on the evolving consumer and we are pleased to host a conference to explore this new landscape.”

Oppenheimer’s next conference will be the Montauk Emerging Life Sciences Summit, which will be held on June 26-28in Montauk, NY. The 22nd Annual Technology, Internet & Communications Conference will follow on August 6-7 in Boston, MA, followed by the Midwest Corporate Access Day in Chicago on August 15.

Oppenheimer & Co. Inc.
Oppenheimer & Co. Inc. (Oppenheimer), a principal subsidiary of Oppenheimer Holdings Inc. (OPY on the New York Stock Exchange), and its affiliates provide a full range of wealth management, securities brokerage and investment banking services to high-net-worth individuals, families, corporate executives, local governments, businesses and institutions.

SOURCE Oppenheimer & Co. Inc.

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iCAN: Israel-Cannabis CEO and Founder Saul Kaye to Participate at the World Cannabis Congress in Saint John, New Brunswick



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iCAN: Israel Cannabis Founder and CEO Saul Kaye will participate at the World Cannabis Conference being held in Saint John, New Brunswick, Canada from June 16-18, 2019.

Kaye, a leader in the global cannabis ecosystem will moderate a session entitled, “Innovative Methodologies and Emerging Topics in Global Cannabis Research.”  Panelists are Dr. Suzanne Sisley MD President and Principal Investigator, Scottsdale Research Institute and, Dr. Jerry King, R&D Consultant, CFS.  The session will take place at the Saint John Trade & Convention Centre on June 18.

The World Cannabis Congress (WCC) is an exclusive, invite-only event for international cannabis leaders, influencers and trend setters. The event will have hundreds of attendees from around the world from business, government and medicine.

In addition to his leadership of iCAN: Israel Cannabis, Kaye is an industry advisor to the Medical Cannabis Caucus of the Israeli Parliament, as well as an advisor to the Ministries of Economy and Health in Israel. He is a licensed pharmacist and a successful entrepreneur with both retail and e-commerce experience. Saul has founded multiple companies spanning six countries across the US, EuropeIsrael and Australia.

Canada has truly been a global trailblazer in the cannabis industry.  Canadian cannabis companies and its stock market are influential and forward looking and we in Israel, the R&D capital of cannabis, collaborate with our Canadian friends on many different levels.  I look forward to participating at the WCC as the medicine and business of cannabis develops at breathtaking speed both in Israel and beyond,” said Kaye.


SOURCE iCAN: Israel Cannabis

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Loyalist College to launch Canada’s first Technology Access Centre for natural products and cannabis



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Loyalist College is the recipient of a $1,750,000 Natural Sciences and Engineering Research Council of Canada (NSERC) College and Community Innovation (CCI) Program grant over five years to launch Canada’s first Technology Access Centre (TAC) for natural products and cannabis. In addition, Loyalist received $1Mthrough the Canada Foundation for Innovation’s (CFI) College-Industry Innovation Fund (CIIF) to add specialized equipment to the TAC.

Loyalist was one of 90 recipients at colleges, cégeps and polytechnics across the country to receive part of the $73M in funding, announced today by the Honourable Kirsty Duncan, Minister of Science and Sport, at Georgian College in Barrie, Ontario. Through the CCI Program and the CIIF, this investment will help post-secondary institutions partner directly with local employers to facilitate commercialization and transform the results of research and development into new technologies to help businesses expand and grow.

The rapid growth of Canada’s cannabis, hops and natural products sectors positions Loyalist’s Applied Research Centre for Natural Products and Medical Cannabis (ARC) as a national innovation hub for small- to medium-sized enterprises. As a TAC, Loyalist will build on the ARC’s 15 years of natural product extraction expertise and analysis-based applied research. In transitioning to a TAC, Loyalist’s ARC will significantly increase the College’s capacity to lead applied research of commercially relevant natural products and cannabis, and to support innovation by enhancing industries’ access to sector-relevant expertise and technology.

The TAC initiative will cultivate an environment for College-industry partnerships to thrive while providing students with unparalleled opportunities for work-integrated learning; investigating extraction, isolation, and formulation; and product development. In partnership with the Quinte Economic Development Commission (QEDC), Loyalist will support the Bay of Quinte’s burgeoning natural products and cannabis sectors to generate regional socioeconomic benefits, and to provide opportunities for a new generation of innovators. Loyalist will also offer companies across Canada a supportive, community-oriented platform from which to enhance their productivity, expand their reach and augment their competitiveness in the global market.


“We are very grateful for NSERC’s continued support and proud to be Canada’s first TAC for natural products and cannabis. Loyalist currently has more than 25 companies interested in applied research, and as our ARC transitions into a TAC, we will be able to meet their requirements while significantly extending our network to help more companies to innovate. Our Biosciences and Cannabis Applied Science students will have the advantage of being involved in ground-breaking research that propels Canada forward as the world leader in cannabis and natural product developments.” – Dr. Ann Marie Vaughan, Loyalist College President & CEO

“It’s great to see this NSERC and CFI funding come through for Loyalist College’s launch of Canada’s first TAC for research in natural products and cannabis. Being able to conduct research in a state-of-the-art facility means that students working in the College’s ARC will be able to build up their expertise in product analysis; which can then be applied directly to commercial development. This is just the beginning of seeing a new series of natural products being designed, assessed, made and delivered from our region.” – Neil R. Ellis, Member of Parliament for Bay of Quinte

“I am so proud to see the innovation that is driving research and economic development in our rural community through Loyalist College’s ARC. Innovation is key to Rural Sustainability and this investment will ensure that we are training the next generation in the latest technological advances. I congratulate them on their NSERC and CFI grant, and wish them all the best of success.” – Mike Bossio, Member of Parliament for Hastings—Lennox and Addington

“The Quinte Economic Development Commission is proud to be a supporting partner with Loyalist College on this important initiative that is aligned with economic development opportunities and priorities in the region. The TAC will support industry research and innovation for companies in key industry sectors as well as helping students develop in-demand skills and experience. Congratulations to the team at Loyalist on launching this important project.” – Chris King, Chief Executive Officer, Quinte Economic Development Commission


SOURCE Loyalist College

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