There's a form I have to give to every person who gives me an application for a mortgage. In my business lingo it's called a "TIL" for Truth in Lending. It provides detailed information on a loan quote so the customer can be well informed.
But there is another kind of "Truth in Lending" and it involves the applicant's responsibility to provide truthful information on their application.
I recently received an application from a customer for a home purchase. There were a few items on it that didn't seem quite right, however. I began to do some research. The borrower's stated employer didn't employ people with the borrower's stated occupation. The stated work phone didn't ring to the supposed employer. One question on the application was not answered truthfully. Discrepancies like these often indicate that the borrower is trying to commit mortgage fraud.
Now, don't misunderstand. I'm not talking about accidentally putting your cell phone number in the work phone number field on the application. What I am talking about is intentionally giving false information on a mortgage application. Not only is this a bad thing to do but it can also land you in prison for up to 30 years.
Amazingly, mortgage fraud is more rampant than ever in California.
We all certainly saw the news about the thousands of loans that were given to people who should never have gotten them. Unfortunately, the lending pendulum has swung all the way in the opposite direction. Now lenders are looking for any reason NOT to give someone a loan.
Loan underwriters, the individuals who decide whether or not an application is approved, are now Junior Detectives. They will call your work phone to make sure it rings to the place you have stated. They will research your employer on the Web to make sure it exists. Own a business? They may look at the online information about the business on file with the State. If anything on the application doesn't check out, the application will be denied with no second chances.
This is still a great time to buy or refinance but only if you are completely honest throughout the process.
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