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How does mortgage fraud work?

On Behalf of | Jan 25, 2023 | White Collar Crimes

Mortgage fraud is one of the many white-collar charges that everyday people could face. It’s also one that some people commit without realizing what they are doing is actually a crime.

Here is how you might find yourself accused of it:

As a potential homeowner

You fill in a mortgage application, and when the lender reviews it before finalizing the loan, they discover that the information you put on the forms does not square with your current situation.

It may be that your income has dropped since you first applied or that you made a clerical mistake. However, if the lender believes you intentionally tried to inflate your income, they may cry fraud.

As someone in the real estate business

Maybe you overvalued the property when asked to appraise it. It could be a genuine mistake, or it could be something the seller or lender asked you to do. Maybe you figured it was harmless to round the number up to the nearest hundred thousand dollars.

The lender may be unhappy about this, especially if the person who took the loan is later unable to pay it back. They may report you to the authorities, believing that you were committing intentional fraud.

While a certain amount of salesmanship is allowed in the world of real estate, it’s crucial that everyone involved respects the laws. Mortgage applications require complete honesty, and fudging the truth could come back to haunt you.

In this case, you will need legal help to examine your defense options. What might have seemed harmless will damage your reputation, finances and liberty if convicted.


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