What Is Mortgage Fraud?

• September 3rd 2025

by UrbanTurf Staff

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Today, UrbanTurf takes a look at a real estate topic that has recently been making headlines: mortgage fraud.

Mortgage fraud is a financial crime involving intentional deception or misrepresentation during the mortgage lending process. This can include providing false information on loan applications, such as overstating income, misrepresenting employment status, or falsifying property details to secure favorable loan terms.

The key element distinguishing fraud from honest mistakes is intent; the individual must knowingly provide false information to deceive the lender. Such fraudulent activities can be committed by borrowers, lenders, or other parties involved in the mortgage transaction.

There are two primary categories of mortgage fraud: fraud for property and fraud for profit. Fraud for property typically involves a borrower who misrepresents information to qualify for a loan they wouldn't otherwise obtain. On the other hand, fraud for profit is usually perpetrated by industry insiders, such as appraisers or mortgage brokers, who manipulate the system for financial gain. This can include schemes like inflating property values or submitting bogus invoices for nonexistent renovations.

A recent example of mortgage fraud allegations involves Federal Reserve Governor Lisa Cook. Cook was accused by President Trump of misrepresenting two properties as her primary residences to obtain better mortgage terms. Cook denies any wrongdoing and has not been formally charged.

Mortgage fraud carries severe penalties, including substantial fines and imprisonment. It is prosecuted under various federal statutes, such as wire fraud and bank fraud laws, with potential sentences of up to 30 years per offense.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/what_is_mortgage_fraud/23818.