A person who makes a misrepresentation on a loan application in order to qualify for a mortgage has committed fraud. While many people consider this sort of action to be a harmless “white lie,” there are serious consequences for mortgage loan fraud.
The first consequence involves your mortgage itself. As soon as your lender discovers a false statement, it can call the loan balance due. If you are unable to repay the loan in full, the lender can try to seize your property.
Additionally, mortgage loan fraud is a federal crime. There is a chance that you could be prosecuted, and if you are convicted the consequences are harsh. Penalties can include fines and jail time.
Even if you avoid criminal prosecution, mortgage loan fraud can be a type of financial suicide. Your credit history will contain a horrible black mark for years. Also, it may prove impossible for you to secure any future loans from reputable lenders.
If you are concerned about mortgage loan fraud, you should consult with a lawyer as soon as possible. An experienced real estate attorney can advise you of your rights and responsibilities, and recommend a course of action.