More borrowers are being dishonest on their mortgage applications, according to a recent story in the Miami Herald.
Mortgage fraud risk is up by nearly 17 percent in the most recent 12-month period, according to CoreLogic. “Occupancy” fraud is rising the fastest, in which applicants deliberately misrepresent their intended use of the property. For example, a client may tell a lender that they plan to live in the house when they really intend to rent it out. Applicants who live in the house usually qualify for lower interest rates and down payments than those who intend to rent out a home.