@Anonymous wrote:
@Anonymous wrote:Blah. If it's not on your credit report it doesn't exist to them. They don't care, they just want to cover their own butts. I am hiding short term debt when I use a biz card, it doesn't make it fraud if I don't disclose it. After many mortgages and refi's I have never been asked for anything other than proof of income and a tri-merge credit report. I don't remember them asking me if I owe any money that isn't on my CR.
I work with a group that investigates mortgage fraud for some of the largest ins. companies. As long as the mortgage does not go into foreclosure, this statement is plausible, even though it is technically fraud.
When the mortgage goes to foreclosure however, the mortgage insurer is very interested in whether the original application and vitae were correct because it will impact whether or not they have to pay the claim. We are currently investigating upwards of 400 cases per month. In a large percentage, there is evidence of fraud. More often than not, it is perputrated by the mortgage broker. But many cases are resolved (on our part), by discovering (and reporting),that there were 'inconsistancies' between the application as stated and what the facts bear out.
Since the investigation is the end of our involvement, I can't say what happens after that but suffice to say it's not pleasant for the loan originator nor the borrower.
Starting Score: TU 737 EQ 721I realize that this thread has migrated far away from the OP's question and for that, I appologize but I'm compelled to respond to the poster's comments beause anyone considering applying for a mortgage should consider very carefully, the possible ramifications of signing a fraudulent application. Please feel free to break this out into it's own thread if appropriate.
@Anonymous wrote:
Without boring you too much, "fraud" is an intentional act which is difficult to prove.
Actually, it's not very hard at all to prove that the application stated "cash on hand $xx,xxx.xx" and the applicant can not show where the funds came from or more often, provided false information as to the source.
Borrowing money from a friend or family member, probably not fraud.
Borrowing from a friend or family member is not fraud. Stating on a mortgage application that you are not borrowing for the down payment or closing costs IS fraud.
Giving that same person a deed of trust/contract and specifically telling them not to record the instrument until after approval, possible fraud.
Not applicable to this discussion. Agreements outside the mortgage application are not considered in a mortgage fraud investigation.
To further confuse the issue, many states have "anti-deficiency" laws, which mean that in event of default, the mortgage/trust holder can only look to the value of the property for payment. There is no personal liability.
But, we are not dealing with the mortgage/trust holder. We are discussing the mortgage INSURANCE company who underwrote the mortgage for the mortgage/trust holder AND anti-deficiency laws do not apply if there was false information on the application.
illtakecreditforthat, You have summed up the essence of this debate very well.
The fundemental message is that one should NEVER allow false information to be submitted on a mortgage application whether supplied by yourself or the ever-so-helpful mortgage broker. The possibility that the transgression may come back to haunt you (even years afterward), is a real possibility.
And, thank you for your candor. The technical issues could be argued ad-infinitum but the truth is that each case will be measured on it's own merits and this if not the forum for that.
Best regards,
IMA