Mortgage fraud is misrepresentation in mortgage contracts designed to benefit one or more parties to the contract.

Sometimes it can be as simple as an applicant lying about financial information to make himself seem more credit-worthy. Sometimes it can involve a few people, such as a real estate agent, an appraiser, and a lender, all colluding to split the profits on a property that isn’t worth as much as they say it is.

When committed by an applicant looking for approval on a loan that he or she can’t legitimately afford, it is known as fraud for housing. Mortgage fraud can also take the form of fraud for profit, when an appraiser, a home inspector, a lender, a real estate agent, or another small group of co-conspirators work together to misrepresent the value of a home for the purposes of securing a larger loan or sale price.

The FBI is the primary agency which investigates mortgage fraud, and increasingly so since the housing bubble of 2008. Naturally, fraudsters would be better off steering clear of the FBI.

There are many varieties of common mortgage schemes that the FBI has identified. Among them are foreclosure rescue schemes, loan modification schemes, illegal property flipping, condo conversion schemes, equity skimming, silent second mortgage, HECM (home equity conversion mortgage, or reverse mortgage) fraud, air loans, and others.

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