Kushner | Law Group PLLC
Kushner | Law Group PLLC
Kushner | Law Group PLLC

Vigorous Advocates Fighting For Your Rights

What are the two main kinds of mortgage fraud?

On Behalf of | Apr 14, 2022 | White Collar Crimes |

Mortgages are massive financial instruments that allow individuals or businesses to finance the purchase of real estate. The French word mortgage alludes to the long-term repayment obligations involved. Many people spend three decades paying off a mortgage.

Banks limit who they extend mortgages to with regards to which borrowers represent more or less risk for the lender. Mortgage fraud intentionally interferes with the lender’s ability to make informed decisions about the people they approve for financing.

Mortgage fraud falls into two distinct categories, which might surprise those unfamiliar with this financial crime.

Mortgage fraud for profit

When people think of mortgage fraud, they likely think of mortgage fraud for profit. They might picture a broker who helps buyers sneak their way through the underwriting process so that they get a commission on the loan.

That certainly does occur, as does fraud for profit that involves completely fabricated properties or buyers that don’t exist. Lenders can lose hundreds of thousands on fraud-for-profit schemes.

Mortgage fraud for housing

Fewer people know about mortgage fraud for housing, but it may occur more frequently than mortgage fraud for profit. Banks may not find out about and prosecute fraud for housing as frequently because it is less associated with immediate defaults on new mortgages.

Someone lying so that they can buy a house will probably do everything in their power to retain ownership of that property. However, they certainly can still face prosecution for lying to the lender if they get caught later, especially if the lender stands to lose money.

Learning more about decisions that might be white-collar criminal offenses can help you avoid unintentionally breaking the law.