An overview of mortgage fraud

On Behalf of | Aug 4, 2023 | Criminal Defense

Home prices are rising, and it can be difficult for some people to afford a mortgage. However, if they obtain a mortgage fraudulently, that can lead to serious penalties.

Mortgage fraud overview

Mortgage fraud involves providing false information during the mortgage process so a buyer can secure a loan or obtain better financing for a property. There are different types of mortgage fraud.

With application fraud, the potential borrower purposely provides inaccurate information on the application, like a higher income than they earn or fewer debts. Another type of fraud involves using a false or stolen identity. They apply for the mortgage under another person’s name, take the funds and do not repay the loan.


The penalties for mortgage fraud may vary, depending on the situation; however, there are some common consequences that are helpful to understand.

The borrower may be required to pay a fine. The court may also require the borrower to pay restitution to the financial institution.

Mortgage fraud can lead to a prison sentence that ranges from months to years, in addition to probation after their sentence is complete. Probation means that the person is monitored by an officer to make sure they meet the conditions of their release.

Finally, in addition to criminal penalties, fraud victims may pursue civil lawsuits against the borrower to regain the money they lost, the borrower can damage their credit and they can suffer reputational harm.

However, if a person is accused of mortgage fraud, there are defenses available.

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