Most people old enough to want to purchase a home or secure a mortgage will remember that not that long ago, major banks and mortgage lenders were happy to extend financing on very expensive homes to people with no provable income or assets that could serve as collateral. Years of such practices wildly inflated what standard of housing people associate with certain salaries.
Unfortunately, those lax lending practices directly contributed to the financial crisis of 2008, which produced a massive downturn in real estate values and mortgage lending. If you want to purchase your dream home these days, your mortgage application is subject to much more scrutiny than it would have received prior to the financial crisis. For many home buyers, that could mean not qualifying for enough mortgage funding to make a reasonable offer on the kind of home they’d like.
Lying to improve the odds can seem tempting in that situation, especially if you have every intention of paying the mortgage. Misrepresenting your situation or lying on your mortgage application isn’t a harmless way to increase your chances of approval. It actually is considered mortgage fraud, which could result in criminal charges.
Many people have the mistaken idea that only a professional who stands to increase their income could wind up charged with mortgage fraud related to a residential real estate purchase. However, the truth is that anyone who intentionally misrepresents the value of a property or the circumstances of a buyer on a mortgage application opens themselves up to potential criminal charges.
Inflating your income, creating a fake employment history or otherwise misrepresenting yourself on a mortgage application could lead a lender to take more of a financial risk than they would if they knew the truth. Fraud charges can carry significant legal penalties and impact your reputation for years to come. If you’re charged with mortgage fraud, it’s important to have experienced legal guidance.