The American dream of owning a nice home can be a very compelling motivator. Before the housing bubble burst, many people were willing to go to extreme lengths to have homes of their own. The seemingly ever rising home values combined with federal incentives for home ownership made buying a home seem like a situation without any potential downside.
When potential homeowners and lenders hit snags when attempting to qualify a buyer for a mortgage, the idea of contorting the numbers to make them fit the requirements may not have seemed out of line. But now, in the wake of the collapse of the housing market, law enforcement authorities are looking closely for instances of potential mortgage fraud.
Earlier this week, the Atlanta Journal Constitution reported that two women, who had pled guilty to charges of mortgage fraud, were sentenced in Fulton County Superior Court.
One of the women was sentenced to two years probation in connection with charges related to the sale of a home in South Atlanta in which the buyer of the property allegedly misreported his income to the lender. Charges are still pending against the buyer.
The other woman, pled guilty to receiving mortgage loans for two separate properties, both of which she claimed would be her primary residence. She was also accused of misrepresenting her income in her loan application. That woman was sentenced to three years probation and a $1,500 fine.
It is likely that many cases in which a potential buyer is accused of misrepresenting their income, both the broker and buyer assumed that the housing values would continue to rise and the residential property would be sound investment regardless of the buyer’s income.
Source: Atlanta Journal Constitution, “2 women plead guilty to mortgage fraud,” Joel Provano, Jan. 10, 2012