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The Basics of Mortage Fraud – John Hanson, CPA, CFE

In monitoring fraud activity across the United States, it has been no surprise to see so much attention to and interest in mortgage related frauds.  Among the myriad of mortgage fraud schemes that exist, they generally fall into one of two categories, depending on their intended purpose: for property (i.e. housing) or for profit.Fraud for property involves schemes whereby those wishing to become homeowners or purchase property lie or employ deception in order to qualify for a mortgage.   They may do so because they cannot afford the property (“dream-house”) or because they know they will not otherwise qualify for a loan without lying.  This is most often done by falsifying information on a loan application, sometimes to include moderate “back-stopping” (a tradecraft term whereby which resources are employed to give the appearance that information is accurate if checked).

These are not the frauds which cause significant individual financial impact, as the … Read More

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