What Constitutes Mortgage Fraud?
A.Mortgage Fraud is a term used to describe a broad variety of actions. Mortgage Fraud is considered a White-Collar Crime. The most common forms of Mortgage Fraud seen today are: Property Flipping Property is purchased falsely, appraised at a higher value, and then quickly sold. The practice of property flipping is made illegal because the appraisal information is fraudulent; the practice usually involves fraudulent appraisals, doctored loan documentation, inflating buyer income, and/or kickbacks to parties involved in the deal. Silent Second The buyer of property borrows money for the down-payment from the seller, which is not recorded, and therefore unknown to the primary lender. Therefore, the lender believes the buyer has invested their own money, when in fact it has been borrowed, and the lender is more willing to grant the requested loan. Nominee Loans/ Straw Buyers The borrower uses someone elses name and credit history to obtain the loan. Equity Skimming A straw buyer purchases
