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Mortgage fraud: What is it, and how does it occur?

On Behalf of | Nov 15, 2021 | White Collar Crimes |

Mortgage fraud is one of the most common white-collar crimes prosecuted in New Jersey. State and federal authorities typically work hard to acquire a conviction in these cases.

You are likely already familiar with profit-driven mortgage fraud schemes such as foreclosure prevention and loan modification scams. However, you must understand that borrowers applying for a loan can also face mortgage fraud charges.

How consumer mistakes can lead to charges of mortgage fraud

People seeking a loan for housing typically believe they are safe from criminal allegations. Some of them do not even realize their actions are illegal. Unfortunately, mortgage fraud for housing occurs in several ways. Learning how borrower fraud happens can help you avoid committing a crime. Examples include:

  • Lying about income on a loan application
  • Submitting altered (or forged) documents to “prove” income
  • Lying about other assets on applications
  • Inciting an appraiser to provide an inaccurate report
  • Hiding or denying debts on loan applications

You may think no one will catch you when you tell “little white lies” on a loan application. However, lenders now have a wealth of technology at their disposal and will likely uncover the truth.

What will happen if you get caught?

At the least, you risk losing any earnest money already paid and could face criminal charges on the state level. If federal authorities find your actions particularly egregious (or any kind of electronic transmission was involved), you may also face federal fraud charges.

To protect yourself when shopping for a mortgage loan, we recommend learning more about New Jersey white-collar crimes and their consequences.