Mortgage fraud, also known as real estate fraud, involves schemes to defraud a
federally insured lending institution. These frauds occur when someone knowingly
confuses, lies or omits data during the mortgage application process. This kind of
fraud is a material misstatement, misrepresentation, or omission in relation to a
mortgage loan which is then relied upon by a lender.

Lenders, borrowers, buyers, sellers, and real estate professionals are the main kind of
people capable of committing this crime. Mortgage fraud is a highly involved crime
that may affect borrowers and lending institutions alike. It is assumed that about ten
percent of all mortgage applications in the nation have vital information omitted,
whether they be erroneous or deliberate. It is not easy to prove deliberate
omissionand this is one of the reasons why convictions for mortgage fraud are not as
common of an occurrence.

What distinguishes mortgage fraud as a kind of fraud is that it requires motive,
moving away from an error. The prosecutor is responsible for demonstrating this
purpose, which can be very difficult to achieve. Even if the effect of the fraud is not
what was expected, it is still known as fraud and charged as such.
Mortgage fraud and real estate fraud charges are very serious. Defendants may be
prosecuted not only on the actual loss caused by the mortgage fraud scheme, but also
on the intended loss.