Mortgage fraud has increased over the past year with about one out of every 109 mortgage applications having been found to contain false or misleading information, according to real estate data firm CoreLogic.  Because home prices are rising and demand is strong, most mortgage fraud in this type of market is motivated by borrowers trying to qualify for a mortgage.  Undisclosed liabilities, credit repair, questionable down payment sources, and income falsification have been the most common misrepresentations.

CoreLogic identifies the following as the most common types of mortgage fraud:

• Income fraud:  An applicant misrepresents the existence, continuance, source, or amount of their income.
• Occupancy fraud:  An applicant deliberately misstates the intended use of a property as a primary or secondary residence or an investment.
• Transaction fraud:  The applicant misrepresents the nature of the transaction, such as an undisclosed agreement between parties, falsified down payments, non-arm’s-length sale, or use of a straw buyer.
• Property fraud:  An applicant intentionally misrepresents information about the property or its value.
• Undisclosed real estate debt:  An applicant fails to disclose additional real estate debt or previous foreclosures.
• Identity fraud:  An applicant alters their identity or credit history, or uses a false identity.