Question:

What is mortgage broker fraud?

Answer:

Every misrepresentation, deliberate omission and distortion of facts on a mortgage application constitutes mortgage fraud. Mortgage broker fraud refers to the cases when a mortgage broker is partially or solely responsible for the occurrence of fraud.

Mortgage brokers being insiders of the business have many ways to crook you. Sometimes a mortgage broker will lure borrowers with rates he has no intention of honoring. Or, he or she may advise borrowers to make a little twist in the numbers to get "more house". Sometimes brokers would lie that they locked the rate of a loan while, in fact, they let it float on their own risk. It is a common practice that some brokers will charge undisclosed fees later in the loan process, when it is very unlikely that the borrower will walk off and sacrifice earnest money.

Other mortgage broker fraud examples may be telling the borrower to refinance with no obvious need for that; or influencing inflated house appraisal.

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