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Whenever money is involved, there is a good chance that someone will try to obtain it by fraudulent means. Mortgage lenders rely on credit checks, employment verification, along with many other tools to protect themselves from falling victim to possible schemes. What types of fraud are most common? Keep reading to find out.
Jake Hill, CEO of DebtHammer.
Fraud for Profit
Lenders can face a type of mortgage fraud that is called fraud for profit. This kind of fraud is usually performed by industry insiders with authority and knowledge, like appraisers, bankers, mortgage brokers, and even attorneys. These insiders will perform fraud through misrepresentation or omission. Their goal is not to secure a loan to obtain a property. Their goal is to steal equity/cash from lenders. This kind of fraud can be difficult for lenders to detect because the individuals who are involved are within the industry and thus are meant to be trusted.