A borrower and/or co-borrower that purposely gives incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.

Fraudulent loan schemes generally prey on vulnerable consumers, the unemployed, and/or those who have bad credit ratings, or those in immediate need of money for emergencies.

How Fraudulent loans work
A fraudster (friend or stranger) offers you money, normally thousands, to purchase a home or tells you how you can easily gets started making huge money in real estate by becoming a real estate investor. Sometimes they even tell you how they will pay several months of mortgage in advance in order to allow you to rent the property. You give them some information and soon they have you approved for a property you have not even seen. You are now purchasing a property for alot more than the property is worth, and committing FRAUD.

Other types of fraudulent loans may include applying for a loan with a fake identity, forging loan documentation, or even posing as a financial institution in order to collect a down payment on an alleged loan, and disappearing after receiving the cash.

Protecting Yourself
If you are being encouraged to falsify any information on your loan documents, beware. Seek legal counseling, because even if you’re tricked into committing mortgage fraud, it’s still a very serious crime, and you can be prosecuted.

Protect your personal information. In order for someone to apply for a fraudulent loan in your name, they need your personal information. Be cautious about who you give this information to. It’s also a good idea to keep a close eye on your credit report. If you do fall victim, the sooner you catch the sooner you can prevent yourself from incurring any financial damages.

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