Frequently, when financial professionals face accusations of fraud, the issues relate to profit-driven schemes. Mortgage brokers implicated in mortgage fraud for profit schemes may face criminal prosecution and a host of different consequences, including the loss of their professional licensing.
In some cases, mortgage brokers and similar professionals may end up implicated in mortgage fraud for housing schemes. The penalties they face could be similar even if the intent behind the conduct was less malicious.
What is mortgage fraud for housing?
Anytime people intentionally misrepresent circumstances to improve their chances of securing a mortgage or to obtain better mortgage terms, they may have committed mortgage fraud. Many people lie or exaggerate on mortgage application paperwork in the hopes of securing better rates or a higher total mortgage amount.
They may misrepresent their income and employment or claim to be the sole owner of high-value assets. The goal is to make themselves look like less of a risk to mortgage lenders. In some cases, mortgage brokers and similar professionals knowingly overlook falsified information or encourage borrowers to misrepresent their circumstances.
The only profits a broker is likely to receive other than a satisfied client is the traditional pay or commission they receive for the mortgage they help the applicants acquire. However, their decision to knowingly submit inaccurate information or to encourage aspiring home buyers to misrepresent their circumstances can constitute fraud.
While the goal might simply be to help people get into homes rather than to derive personal profit, the broker can still face the same general charges and potential consequences as they might in a for-profit scheme. Those accused of involvement in mortgage fraud for housing schemes may need help planning an appropriate response to the charges they face.