An older (not much!) couple I know this week applied for a mortgage loan to roll the small, existing balance on their current mortgage into one to purchase a 'steal-of-a-deal' home they intend to inhabit. However, the husband already is retired, and the wife intends to retire in December. However, the wife -- now employed full-time -- reported current income on her loan application, and didn't mention her imminent retirement ("They didn't ask, and I didn't volunteer the information," was her response when I queried the fact. I suspect the application DID ask, though perhaps more subtly than she noticed, but...). I'm wondering if it constitutes mortgage fraud to report current income knowing one plans to retire to a reduced income soon. Is it? She hasn't filed any intent to retire formally yet, although her plans are made. But, I know in most cases, underwriters wish to be assured that current employment status will endure for at least the next two years. I don't want to mistakenly suggest to these applicants that they amend their likely-to-be-approved application for a home that's a bargain at its price. But, I also don't wish to see them borrow trouble by mis-reporting their anticipated income in a manner crossways with the rules. Please advise.
