Buying a home in California is not easy. It can be a very competitive process, especially in recent years. There is more demand for property in most areas than there is supply. The continual need for housing pushes prices up and makes it increasingly difficult for buyers to make competitive offers.
In many areas, people have to look at houses priced well under their maximum possible mortgage amount so that they can offer more than the asking price. The increased pressure to qualify for a bigger mortgage could lead to someone inadvertently committing an act of mortgage fraud.
Misrepresenting your income constitutes mortgage fraud
Lenders decide how much they will give you based on your credit history and income. They make the decisions they do to minimize their risk. If you misrepresent your income, a lender may offer you more financing than they otherwise would, putting the company in a vulnerable financial position. Hence they will not hesitate to act if they feel you are trying to defraud them.
Mortgage fraud by individuals is actually quite common. According to an analysis of mortgage applications in 2018, for every 109 mortgage applications submitted, there will be one with indications of fraud. There are even services that help people by providing them with fake pay stubs or fielding calls from mortgage companies to misrepresent themselves as the individual’s employer. So lenders will be looking out for it.
Individuals who utilize these services or exaggerate their situation on their mortgage applications could find themselves accused of mortgage fraud. Yet so could you if you overstate your income by accident or base it on overly optimistic figures. If convicted, you could face financial penalties and time behind bars. If accused of mortgage fraud, it is crucial you seek the help of an attorney to fight the charges and protect your innocence.