What is mortgage fraud?

Mortgage fraud is a type of consumer fraud law that occurs in Washington and across the country. Mortgage fraud occurs when someone intentionally misrepresents information for the purpose of obtaining a mortgage loan. Examples of mortgage fraud include falsifying income or employment information, not revealing liabilities, and providing false information about the borrower’s home’s condition or value. Mortgage fraud affects the borrower, lender, and Title company, as well as any future buyers of the same property. The borrower may suffer financial loss as a result of the fraud, while the lender or Title company may be forced to absorb the costs associated with the fraudulent activity. If the fraud is discovered later, it could cause issues for any future buyers of the property, as they may have to deal with the legal issues surrounding the fraud. Mortgage fraud is a serious legal offense and can result in criminal penalties. Under Washington state law, it is a felony to knowingly make false representations in order to obtain a mortgage. Penalties may include fines, restitution, prison time, and more. Additionally, any convicted of mortgage fraud may have difficulty obtaining credit in the future and could be subject to civil lawsuits.

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What is mortgage fraud?

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