I think we've all heard that not knowing the law is not an excuse. I learned that when I bought a car with tinted windows from a used car lot and was later issued a ticket for dark tint. FortunatelY for me, the car dealer removed the tint and paid my ticket. But MORTGAGE FRAUD isn't so easy to escape.
Just like in all aspects of real estate, a Realtor can be held accountable for mortgage fraud EVEN IF innocent. In the case of Realtors, however, we are supposed to know everything about anything having to do with the vertical alignment of the sales process. So, some Realtors (lenders and buyers too) have been imprisoned over such oversights.
From a Real Estate Broker perspective, which I am, that means that it is im[perative to put forth a Mortgage Fraud disclosure to make it very clear on your first appointment that it will not be tolerated. If you make it a part of your buyer meeting routine, it will become automatic. That's the kind of thing that will stand up in a court of law.
From a consumer perspective, there may not be a clear understanding of the definition of fraud. Simply stated: an intentional or unintentional misrepresentation of material facts pursuant to obtaining a loan.
The most common misrepresentations include:
1. Employment status or income
2. Taxes
3. Outstanding collections
4. Not being honest about the owning status - owner occupancy v. investment property
5. Lump sums of money that are borrowed, not gifted
I truly think most people mean well, that they don't think anything will go wrong so they slightly misrepresent. But facts are facts, and lies are lies, no matter how big or small, or what the reason. If a buyer commits fraud, even in the slightest bit, they put themselves, their family, and all those who financially benefit from the sale including the lender and Realtor, at financial and prison risk.
Is it really worth it?
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