Tuesday, April 5, 2016

How Homebuyers Commit Mortgage Fraud


Mortgage fraud involves deliberately misrepresenting or omitting information on a mortgage loan application. Dishonest borrowers commit mortgage fraud to obtain a better loan. Remember -- these actions are illegal and punishable by law:

Income and employment fraud - stating that your income is more than it is, or falsifying information about your job or the type of job that you have.

Identity theft - pretending to be someone else with better credit in order to get approved for a loan; this involves use of fake identification documents with another person's information, such as his or her name, date of birth, address, and social insurance number, among others.

Hiding liabilities - lying about existing debts on credit cards, cars, or other mortgages.

Occupancy fraud - buying a property to rent it out even though the borrower stated that the property will be used as one's primary residence on the mortgage application.

Appraisal fraud - over- or understating the price of the property during an appraisal, giving the borrower more money to finance the home, or thus providing a lower price on a foreclosure.
 
Shotgunning fraud - getting multiple loans for the same property at the same time to obtain a sum more than the actual value of the property. 

Criminal use of real estate - buying a property to use as a place of operations for illegal activities -- making or trading drugs, or prostitution, for instance.


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