Qualifying for a loan today isn’t as easy as it once was. A combination of higher interest rates and increasing demands for various types of loans means that lenders have the luxury of being more discriminating in who they choose to lend to. When you’re looking for a loan, you also want the best interest rate and repayment terms. If your financial health isn’t in tip-top shape, it can be tempting to bend the truth a little to sway the odds in your favor.
Unfortunately, what many people don’t realize is that these little white lies can potentially land a person in legal hot water. Loan fraud is a real crime and the consequences can be serious. Here’s what you need to know to protect yourself.
What Is Loan Fraud?
Loan fraud occurs when a prospective borrower intentionally provides false information when applying for a loan. For instance, if a borrower misrepresents their income or falsified documents that places them in a better position for securing a loan.
Loan fraud can occur in any type of lender/borrower relationship; however it occurs most frequently with mortgage applications – a type of illegal activity that’s frequently referred to as mortgage fraud. Loan fraud is considered a serious crime because the financial implications can be quite far reaching.
How Loan Fraud Occurs
There are instances in which a borrower makes honest mistakes in filling out the forms to secure a loan. These mistakes are usually identified and the borrower doesn’t suffer any consequence other than needing to answer a few questions. True loan fraud exists when a borrower intentionally falsified their information, and true deceit is often easily spotted by lending agencies.
Loan fraud may consist of exaggerating income information, being dishonest about assets, or lying about the value of property for assessment purposes. For example, a person with a more favorable loan profile who applies for a mortgage on behalf of a relative without informing the lending agency of their intentions could be considered guilty of mortgage fraud.
While many people don’t realize that these actions can be seen as loan fraud, the issue becomes even more complicated when lending agencies encourage dishonest acts, like exaggerating income, falsifying employer information, or being dishonest about the source of a down payment on a loan.
What If You’ve Been Accused of Loan Fraud?
If you’re being accused of loan fraud, the most important thing you can do is contact a bank fraud lawyer to discuss your case. An experienced San Diego criminal defense lawyer can defend you against loan fraud charges and protect your future. Depending on the circumstances, loan fraud can be charged as either a felony or misdemeanor in the state of California. Don’t take chances with your reputation and freedom; contact John Kirby Law in San Diego to discuss the accusations against you today.