Posted in Finance, Accounting and Economics Terms, Total Reads: 113
Definition: Mortgage Fraud
Mortgage Fraud is giving incorrect information related to the mortgage so that huge of loan can be borrowed from the financial institution Banks and private financial institutions. Mortgage fraud had been the cause of a number of serious Scams which had affected a number of global economies badly and brought recession conditions in the past. Mortgage fraud is considered as a serious crime all over the world.
In countries like USA, the cases of mortgage fraud are taken seriously and high penalties are imposed on the convict, If found guilty.
Mortgage fraud can be considered, if found doing any of the following activities
1) Claiming a property, which borrower does not own and using that property as mortgage for the loan
2) To take the benefit of low interest rate, sometime people take loan for something else and use the loan amount somewhere else. For Example people take education loan for building house
Mortgage fraud can happen from both the sides (Borrower and the lender).If the borrower gives wrong information to get sanction the bigger loan amount, then it is considered to be traditional mortgage fund. Other type of mortgage fund are the scams which takes place at lender side, where lender intentionally does not disclose all the conditions and later try to fraud their customer and seize the property used by the customer as a mortgage.