Financial fraud comes in many forms. Mortgage fraud is arguably one of the most common.
After all, many parties benefit from a successful real estate transaction, meaning that different people in a transaction have an incentive to influence it fraudulently. What two groups often get caught up in mortgage fraud allegations?
People who want to buy a specific house or who just barely fail to qualify for a mortgage may get desperate enough to lie. Some exaggerate their income or claim assets that they don’t own to help them qualify.
Others might go to extreme measures, like setting up false phone numbers for employment references to convince a lender that they earn more than they do. Homebuyers who lie about their assets, income or personal situation could find themselves accused of mortgage fraud.
Mortgage brokers and other real estate professionals
Those who help buyers qualify for mortgages have a financial incentive to get them to closing. When a broker has already invested multiple hours with one set of clients only to have them fill to qualify, they might make a few small changes on their own to get them through the underwriting stage.
Other real estate professionals could also play a role in mortgage fraud, such as appraisers or inspectors who intentionally misrepresent the property to help make a closing happen. These forms of mortgage fraud are known as for-profit fraud.
Learning what constitutes mortgage fraud could help you avoid making a serious mistake when buying a house or helping someone buy a house. If you find yourself facing mortgage fraud charges, it’s crucial that you seek legal guidance.