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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated November 11, 2020

What is Mortgage Fraud?

Mortgage fraud refers to an applicant's untruthful representation of information on a mortgage application.

How Does Mortgage Fraud Work?

Mortgage applications ask for a variety of details concerning an applicant's financial position. These include cash account balances, debts, occupations, and all sources of income. Mortgages are approved or declined based on this information because it suggests the level of risk to the lender.

Mortgage fraud is the deliberate misrepresentation of an applicant's financial data, frequently accompanied by fabricated documents. Applicants engage in mortgage fraud to obtain higher mortgage amounts than truthful information alone would otherwise permit. For example, untruthful applicants might indicate that they make $100,000 per year and alter their paycheck stubs or tax forms (for example, a W-2) in an effort to make this appear true.

Why Does Mortgage Fraud Matter?

Mortgage fraud is a common occurrence that can result in tremendous losses for banks if undetected. Mortgage fraud played a significant role in the 2008-2009 U.S. credit crises. Offenders face criminal prosecution if caught.

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Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Mortgage Fraud, then please ask Paul.

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