Fraud Flashcards
(24 cards)
Actual Fraud
Intent to deceive
Actual Fraud
Intent to deceive
Constructive Fraud
Unintentional; result of carelessness
Fraud for Housing
when a borrower is misrepresenting assets, undisclosed obligations, income
Fraud for Profit
Insider fraud with the intent to secure fraudulent loans
Penalties under fraud
Up to $1,000,000 and/or 30 years in prison
Straw Buyer
Involves an individual who “borrows” another’s identity to receive a home loan; Poster boy
Property Flipping
Occurs when a resale of the home involves misrepresentation (ex. inflated appraisers)
Loan Flipping
Coercing a borrower to repeatedly refinance a loan in order to charge high points and fees each time with no benefit to the borrower; Results in Equity Stripping
Churning
When a mortgage broker and borrower work together work together to repeatedly refinance a property. Each time the borrower takes a rate with lender credit to make a “free loan”. The broker gets the commission which he splits with the borrower
Churning
When a mortgage broker and borrower work together work together to repeatedly refinance a property. Each time the borrower takes a rate with lender credit to make a “free loan”. The broker gets the commission which he splits with the borrower
Constructive Fraud
Unintentional; result of carelessness
Fraud for Housing
when a borrower is misrepresenting assets, undisclosed obligations, income
Fraud for Profit
Insider fraud with the intent to secure fraudulent loans
Penalties under fraud
Up to $1,000,000 and/or 30 years in prison
Straw Buyer
Involves an individual who “borrows” another’s identity to receive a home loan; Poster boy
Property Flipping
Occurs when a resale of the home involves misrepresentation (ex. inflated appraisers)
Loan Flipping
Coercing a borrower to repeatedly refinance a loan in order to charge high points and fees each time with no benefit to the borrower; Results in Equity Stripping
Air Loan
A loan in a fictitious property
Churning
When a mortgage broker and borrower work together work together to repeatedly refinance a property. Each time the borrower takes a rate with lender credit to make a “free loan”. The broker gets the commission which he splits with the borrower
Silent Second
A 2nd position mortgage that is not disclosed to the 1st mortgage lender and is not recorded until after the 1st mortgage has been recorded
Asset Renting
A borrower engages in a service that allows them to rent assets temporarily to appear more qualified to the lender; Ex. Borrowing money for a period of time to seem more qualified
Shotgunning
Doing multiple loans on a property with multiple lenders
Straw Seller
A person that is hired to take title to sell a home in name only to conceal the identity of the actual seller
