Fraud also occurs when the appraiser is asked to inflate values of the homes they appraise. This is a negative for the buyer because they may not be able to refinance for a long period of time until the actual market value catches up with the inflated loan amount! This has been done frequently by some large national lenders.

Another form of real estate fraud is when the borrower or broker falsifiesAnother form of real estate fraud is when the borrower or broker falsifies any information required for the approval of the loan. This can include providing falsified or altered documentation such as bank statements, pay stubs, or tax returns. If caught besides being required to repay the entire loan immediately, it can result in enormous fines and possibly jail time.

In many cases the best approach to take when applying for financing is to be upfront and honest. Any information that you may feel is a detriment to your ability to be approved for financing will eventually be revealed. There is a huge amount of personal information that is collected, documented and verified, so there is no point in trying to hide any information.

There is also a great deal of real estate fraud occuring with buyers when applying for mortgages.