Question:

Mortgage Fraud Definition

Answer:

Mortgage fraud is the deliberate omission or misrepresentation of facts on the part of either the borrower or lender with the purpose of obtaining a mortgage loan.

Popular Examples of Mortgage Fraud

Stated income loans are a convenient way to overstate income in order to get oneself qualified for a large loan. Often, nonexistent income from self-employment may be claimed. Stated income loans allow for employment mortgage fraud.

A borrower seeking to fund the purchase of an investment property may claim that this is a primary residence property to get lower rates. This example of mortgage fraud is called occupancy fraud.

Other popular examples of mortgage fraud are identity thefts, appraisal fraud and mortgage fraud ring. The appraisal fraud comprises exaggerated or underpriced appraisal reports, while a mortgage fraud ring is a complex form of fraud involving identity theft and a number of participants, some of which unknowingly, with the purpose to defraud the lender of large amounts of money.

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