The pride that comes with home ownership is especially strong in New York City where properties often appreciate in value faster than in other parts of the country. However, one thing that many people may not be aware of is that the real estate lending world is fraught with mortgage fraud. This mortgage fraud can be committed by either the buyer or the lender. The danger with mortgage fraud in a high-cost-of-living area is that it can lead to major financial losses. There are several different types of mortgage fraud people should be aware of.
What are some examples of mortgage fraud?
One type of mortgage fraud is when people looking to buy a home report inaccurate income. They may fudge the numbers a little bit or outright lie. If someone who is self-employed is looking for a mortgage, they will put their stated income down on the mortgage loan form. If that number is false, it is mortgage fraud once they receive the loan.
Some people commit mortgage fraud by pretending to be owner occupants in the property they’re buying even though they have no plans of living on the property. Non-owner occupants are charged higher interest rates than owner occupants. For this reason, some people misrepresent their intentions for the home.
Another type of mortgage fraud involves the process of gifting a down payment and then having it repaid. You are allowed to include a gift as part of a down payment under the condition that it not be repaid. If it is repaid, that is bank and mortgage fraud.
Where can people go to get help with issues of mortgage fraud?
People who are looking for help may benefit from working with attorneys who have experience handling these types of complex real estate and mortgage issues. A defense attorney may offer guidance to those who have been charged with the white-collar crime of mortgage fraud.