With interest rates and home prices on the rise, it has become a very difficult time to buy a house. Lenders are also very skeptical of those trying to purchase a home without enough of a down payment, high-enough income or a solid credit background. Banks may worry about lending too much money to those who may struggle to repay what they owe.
Even when someone has a solid credit history and has looked at the most affordable houses on the local market, they may still find themselves priced out of housing and desperate to find a way to purchase property. Some of these people will potentially commit mortgage fraud in their hopes of securing financing so that they can buy a home. They will misrepresent their income to improve their chances of getting a mortgage, which could lead to criminal charges.
Lying to a bank can mean federal criminal charges
Inflating one’s income may not seem like that big of an issue to an individual. After all, they may tell themselves that they intend to do whatever they have to to make their mortgage payments every month. However, the income requirements that lenders impose have a basis in someone’s statistical likelihood of fulfilling their obligations.
If someone misrepresents how much they make to qualify for a bigger mortgage, they may find themselves constantly struggling to cover all of their basic expenses. In fact, they may find themselves going into debt and unable to continue paying their mortgage. If someone defaults in a scenario where they lied on their mortgage application, they could be at risk of prosecution for mortgage fraud.
Some misrepresentations are not intentional
Although it would be fraudulent to intentionally inflate one’s income and then either convince someone else to lie for them or present falsified documents validating those income claims, some situations that look like mortgage fraud might actually not be. For example, someone claimed an income level that was too high, the reason might be that they were about to get a promotion or raise, then something fell through.
There are numerous circumstances in which what seems like mortgage fraud might have a totally reasonable explanation. Recognizing that even small misrepresentations could lead to criminal accusations may benefit those who are hoping to buy a home in the near future. Seeking legal guidance to address questions and concerns can be helpful as well.