Mortgage fraud is a white collar crime that involves using incorrect information to get a mortgage loan. It is a crime when that information is intentionally incorrect. If you accidentally misstate something, the lender will usually catch it and you can correct it. However, in the case of mortgage fraud, there is often more going on then a simple error.
The FBI explains that the intent to secure a mortgage loan through fraudulent means can happen in two ways. The first is fraud for housing. In this type of situation, the goal is to gain ownership of a property. If you are the borrower and you do something illegal to help you secure ownership, then it is mortgage fraud for housing. You do not have to act alone. You could bribe an appraiser, for example. Sometimes it involves simply misrepresenting your assets and income to qualify for the loan.
The other type of mortgage fraud is fraud for profit. Instead of trying to secure a property for your own use, you want to make a profit from the mortgage process. This type of fraud is often more complex and involves more people. You would rarely work alone to perpetrate fraud for profit. Often people in all aspects of the mortgage process work together to commit the act. For example, the bank loan officer may be in on the plan. Even attorneys can become involved in this type of fraud. Misusing the mortgage system int his way hurts everyone because you are not only taking from the lender, but what you do impacts the homeowner.