Did you know that filling in a mortgage application incorrectly could land you in court? If the lender believes your errors were intentional, they could claim mortgage fraud.
The Federal Bureau of Investigation (FBI) defines mortgage fraud as one of three things. Misstatement, misrepresentation or omission of information on the form.
It is easy to make mistakes when filling in a mortgage application
We can all make mistakes when filling complicated forms. Here are some examples of how entering the wrong details on a mortgage form could lead to criminal charges:
- Overstating your income: Your boss told you you were due a pay rise in the next few months. You put the future income rather than your current income on your mortgage form.
- Misstating your purpose: You write on the form that you intend to live in the property yourself. You then change your mind and decide to rent it.
- Overvaluing a home: A real estate agent inflates the value of a property you are selling in a home appraisal. The buyer’s lender may accuse you of fraud if they realize the property is not worth that much.
You could also be a victim of identity fraud. Someone could use your details to apply for a mortgage without your knowledge. The investigators may refuse to believe that you did not know about it.
If a court finds you guilty of mortgage fraud, it can have grave consequences. Penalties can run up to $1 million in fines and 30 years in jail. If accused, it is crucial to seek experienced help to to defend against the charges. Making a clerical error does not make you a criminal.