It doesn't matter if you're a homebuyer, loan officer, appraiser or broker, it's possible to get caught up in a mortgage fraud scheme. While it may sound like an innocent way to save money, you could soon find out that you're in serious trouble with the law.
There are many types of mortgage fraud, including but not limited to:
- Fraudulent loan documentation: A common example of this is submitting a forged or altered pay stub as a means of receiving an approval to borrow a larger amount of money.
- Stolen identity: You're only permitted to complete a loan application for yourself. If you steal someone else's identity to do so, it can result in a variety of criminal charges, including mortgage fraud and identity theft.
- Inflated appraisal: This typically occurs when an appraiser works with a mortgage broker or loan officer to provide a high appraisal value to ensure that the buyer qualifies, and the deal goes through.
- Silent second mortgage: This is when a buyer takes out a second mortgage to pay for the down payment on a first mortgage. It's illegal when the buyer doesn't tell the initial lender that they're doing so.
With so many types of mortgage fraud lurking, you must take extreme caution when buying a home or lending money.
The Fraud Enforcement and Recovery Act (FERA) is strict, with sentencing guidelines including prison sentences up to 30 years and fines as high as $1 million.
If you're charged with mortgage fraud, learn more about your case and take the necessary steps in implementing the best defense strategy.