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Assertive Representation In State & Federal Court

Beware of mortgage fraud when purchasing a home

If you’re like most people purchasing a home, you will try to obtain a mortgage for the purchase. As part of this process, you’ll have to apply for the loan. It’s imperative that you’re fully honest as you go through the application. Any misstatements could result in your loan being declined, which means you can’t purchase the home. There’s also the possibility that you’ll be accused of mortgage fraud if you aren’t fully honest. 

When you’re filling out the documents for the loan, you’ll have to disclose both your debts and sources of income. These must be fully accurate. You have to ensure that you include all debts, even loans that family members made to you if you have to pay them back. Most debts are found during a records search, which is usually thorough when you’re applying for a mortgage. Attempting to hide any debts is illegal because these liabilities can alter the loan terms. 

You also can’t embellish your income. Every dollar you make has to be accounted for. This is another factor that can impact the terms of the loan, so be sure to only state actual income. You’ll have to back up the claims with proof of your earnings, so being honest at the start is easier on everyone. For example, you’ll have to hand over bank statements, which can show income and expenses. 

Mortgage fraud is a type of white collar crime that can lead to time in prison or fines. While it’s unlikely that you’ll face these accusations over a minor unintentional error in your loan documents, it’s possible that gross misstatements might lead to a criminal complaint. That can happen even if your mortgage loan officer “encouraged” you to play loose and free with the facts on your application. In this case, it’s imperative that you work with your attorney to find out what defense strategies are possible.