Being accused of any white-collar crime is serious because that opens you up to the risk of a federal charge and time in prison. Hefty fines are also common, which may put you at risk of losing much of what you’ve worked for.
Mortgage fraud is one of the white-collar crimes that you need to avoid. It’s actually easier to commit than some people believe, which is why it’s important to know what it is and how to avoid it.
Mortgage fraud is a growing problem in the United States
Mortgage fraud is a problem that continues to grow as of 2017 statistics. It was found that mortgage fraud increase by around 16.9% in the second quarter of that year. Why? Applicants that year were more likely to provide false mortgage application information.
Mortgage fraud occurs when a potential seller, lender or homeowner omits information or lies about key details during the mortgage lending process. The Federal Bureau of Investigation states that it’s any kind of misrepresentation, omission or misstatement that would affect the lender’s decision.
How can you avoid committing mortgage fraud?
To avoid committing mortgage fraud, you need to make sure that you are always filling out your mortgage applications accurately. Making a genuine mistake doesn’t constitute fraud, but stretching the numbers to make it seem like you earn more than you do or intentionally adding information that isn’t true could lead to accusations of mortgage fraud.
Why do people commit mortgage fraud?
People commit mortgage fraud for all kinds of reasons ranging from wanting to qualify for a home that is out of their price range, greed, the need to take advantage of lower interest rates and a rising demand for homes in the country.
The good news is that you can avoid claims of mortgage fraud by filling out your mortgage application accurately. Some people will work with a lender, agent or attorney to make sure they have the right information in place before turning in the application.
If you are accused of mortgage fraud, be aware that the accusation is serious. You need to defend yourself or could face harsh penalties such as up to 30 years in prison or up to $1 million in fines.