Mortgage fraud is one of the more common white collar criminal charges. Both individuals looking for housing and professionals working in the real estate sector are potentially at risk of mortgage fraud accusations.
Mortgage fraud in the broad sense relates to any scenario in which people materially misrepresent their circumstances when seeking a mortgage. Mortgage fraud could entail lying about assets and income or even committing identity theft. It could also involve a professional coaching applicants to exaggerate their income.
Experts typically group mortgage fraud into two distinct categories. What are the main forms of mortgage fraud?
To get housing
Many people commit mortgage fraud specifically because they need a place to live and do not want to continue renting. They may convince themselves that misrepresenting their finances to a lender is not a problem because they intend to pay their mortgage regardless of what happened. Fraud for housing may not come from a place of malice, but it can still have devastating consequences for mortgage lenders and could lead to criminal prosecution.
For financial reasons
Sometimes, people participate in real estate schemes for financial reasons. They may acquire a mortgage for a property that doesn’t exist. The goal is to defraud the lender for monetary gain, not to acquire a place to live.
Regardless of the intent behind mortgage fraud, the potential charges and penalties may be the same, although the courts may consider intent during sentencing. Anyone accused of a white collar criminal offense may need help responding before the case goes to trial. Understanding factors that influence mortgage fraud allegations can be beneficial for those accused of misrepresenting their circumstances to obtain a mortgage.