4.0 hours Mortgage Fraud – Course Syllabus

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Course Syllabus:

4.0 Elective Hours

One common variation on mortgage fraud is the silent second. In the silent second, the buyer (for example) is going to buy the house for $250,000 and borrow $50,000 on a second mortgage, but they are not going to tell the lender about the second lien. Can the buyer buy the house for $250,000 and the seller take back the $50,000? Yes. It must be disclosed to the lender and the lender's underwriter must consider the payments on the second when qualifying the buyer.

In the forgiving second, the buyer is going to buy the house for $250,000 with a $200,000 mortgage and asks the seller to carry $50,000. The transaction goes to closing and the seller tears up the second mortgage (forgives it).

In addition to falsely claiming that a vacation home or rental property will be occupied as a primary residence to qualify for a no money down loan or a better interest rate, a buyer may sometimes produce a fake lease to help with financial qualifications for a loan. If the new home is being bought before the old one is sold, for example, the borrower might produce a lease that shows the old house will be producing rental income.

Our Mortgage Fraud course reviews and discuss the role of straw buyers, unrecorded second mortgages and the technique of the most common types of mortgage fraud. Case studies are provided for better understanding.

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