Working as a mortgage broker can be financially lucrative and personally rewarding. Brokers earn competitive wages, often receiving bonuses and incentive pay for obtaining financing for as many customers as possible each month.
Many mortgage brokers also take pride in their ability to help people who want to improve their circumstances secure the financing they require to achieve that goal. It feels personally satisfying to help those who have saved and worked hard finally obtain a mortgage to purchase their dream homes.
Unfortunately, the tactics that mortgage brokers use to assist their clients can sometimes open them up to legal controversy. Mortgage brokers and similar financial professionals could face allegations of mortgage fraud because of how they interact with clients.
Mortgage fraud for housing is illegal
When people discuss mortgage fraud, they may think of schemes where people fabricate properties or falsify transactions. The goal is to secure a large payout from a mortgage provider and to disappear with those funds before the lender realizes there is no collateral property.
While mortgage fraud for profit can be devastating for financial institutions, it is not nearly as common as mortgage fraud for housing. Mortgage fraud for housing involves misrepresenting circumstances to improve chances of securing mortgage approval.
Frequently, mortgage fraud for housing involves buyers misrepresenting their circumstances. They might exaggerate their income or fabricate assets to make themselves look more financially secure than they actually are. People often assume such misrepresentations don’t matter, as they have every intention of paying their mortgages.
Sadly, some of them may default and could face foreclosure because they truly were not in the right position to make consistent mortgage payments. If a mortgage broker is aware of or helps facilitate a buyer’s financial misrepresentation, then they may end up implicated in the mortgage fraud scheme even though they may not have received any significant benefits from the buyers whom they assisted.
Mortgage brokers accused of fraud could face a variety of penalties beyond job loss. They could be vulnerable to federal prosecution, especially in scenarios where there is evidence of repeated misconduct when assisting clients.
Professionals facing white-collar criminal charges that might result in federal prosecution generally need help avoiding a conviction. Getting support as soon as possible when facing allegations of mortgage fraud can help professionals mitigate the harm those allegations may otherwise inspire.
