Scary New Trend: Lying About Income on a Mortgage Application


Real Estate News

Scary New Trend: Lying About Income on a Mortgage Application


Written By: Jaymi Naciri
Monday, October 15, 2018

With high home prices and rents, rising mortgage rates, and heavy competition for available properties, potential buyers are feeling more pressure to own a place than ever. ldquo;As a result, an increasing number of buyers are lying and cheating,rdquo; they said. Co>

The property data and analysis company found that fraud >

Theyrsquo;re accomplishing this through Internet sites that help borrowers fudge their income and even provide a confirmation service on cross-check. ldquo;A casual search will result in any number of online services that will not only generate fake pay stubs, but will also answer phone calls and lsquo;confirmrsquo; income verbally, all for a fee,rdquo; said CNBC. Another scam involves borrowers who claim to have received an interest-free down payment gift from a >

The Washington Post also noted that, ldquo;Fannie Mae recently warned lenders via several alerts about a loan-fraud technique in which applicants claim to work for specific companies and provide income and employment information that appears to be bulletproof but turns out to be totally bogus. Applicants frequently claim to have been students immediately before their current employment. This makes it difficult or impossible for lenders to pull tax transcripts from the Internal Revenue Service for the year spent as a lsquo;student.rsquo;rdquo;

The risk is high all around

Borrowers may think of padding their income as a harmless white lie that has little downside if theyrsquo;re able to meet their goal of buying a home, however mortgage fraud carries with it some serious risks. ldquo;What are the possible consequences? Getting turned down for the mortgage is the least of them,rdquo; said Credit.com. ldquo;If your falsehood is discovered after you get the loan, your lender could boost your interest rate or even demand immediate repayment in full. Tax->

And then therersquo;s the risk to the housing industry if this current fraud trend is at all responsible for causing another crash; Co>

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