When you try to obtain a mortgage to purchase a home, you have to go through an application process. This can include having to fill out forms, provide income information, give proof of other aspects of the application and several other steps. In some cases, the process is easy. In other cases, it is more complex. No matter which category your mortgage falls into, you must be totally honest.
If you aren’t totally honest on any aspect of a mortgage application, you can face criminal charges. Mortgage fraud is a crime that encompasses misstatements, omissions, misrepresentation and similar actions when you are applying for a mortgage. There are two main types of mortgage fraud — mortgage fraud for housing and mortgage fraud for profit.
Mortgage fraud for housing is usually done by individuals who are simply trying to get a mortgage so they have a place to live. In this case, the person might provide false income information or incorrect asset information. In some cases, the mortgage fraud might be encouraged by a mortgage lender.
Mortgage fraud for profit is a bit more complex. This type of mortgage fraud is usually done by bankers, loan originators and other business people who are interested in making money off of mortgages. Schemes such as foreclosure rescue schemes, loan modification schemes and home equity conversion mortgage schemes are all forms of mortgage fraud.
Whether you are accused of mortgage fraud for housing or mortgage fraud for profit, you must explore your options for a defense. These charges are very serious and can lead to serious penalties if you are convicted
Source: The Federal Bureau of Investigation, “Mortgage Fraud Overview,” accessed Sep. 30, 2015