Mortgage fraud is a serious offense, and it is also one that someone may commit accidentally. Mortgage fraud can happen if you lease out a property that was supposed to be for your personal residence. It could happen if you claim a home will be your vacation home but actually want to use it to bring in an income through renting.
There are lots of ways to end up being accused of mortgage fraud. Here’s more on some of the possibilities.
- Committing occupancy fraud
Saying that you’re buying a home for one purpose and then doing something else with it may violate your loan’s terms. If you say that you are going to buy an investment property, then that’s what the property should be used for. Similarly, if you buy a property for your personal residence, then you should not rent it out. Doing so could violate the terms of your mortgage.
- Hiding where your down payment came from
Another issue could arise if you hide where you get your down payment or lie about where it came from. Getting a down payment can be hard, but you need to be honest about where it came from. If it’s a debt, the lender needs to know about it.
- Lying about debt
A third way to get in trouble for mortgage fraud is if you lie about your debt. While your credit report will make it hard to do this, it is possible that you could hide debts that aren’t reported on your credit report. Lying about your debt misleads lenders and may result in them lending more than they would have otherwise. For that reason, if a lender finds out, you could be accused of mortgage fraud.
These are all situations that could lead to accusations of mortgage fraud. If you want to avoid accusations of committing fraud, it’s always important to review the details of your loan so you don’t do something that you aren’t allowed to do. You should also be honest on your loan application to avoid making fraudulent claims, which could lead to charges later.