Mortgage fraud is a type of white-collar fraud and criminal act that may consist of an intentional misstatement, an intentional misrepresentation, or a material and intentional omission of information relied upon by loan underwriters or lenders. Mortgage fraud may consist of occupancy fraud in which a loan applicant represents that he or she intends to occupy the proper;ty but doesn't do so. This results in the lender offering a lower interest rate and larger loan amount than what would be offered to an investor. It may also involve overstating the applicant's income or assets. Mortgage fraud also commonly involves the failure to disclose all liabilities, cash back arrangements, employment relationships, and financial terms. Mortgage fraud results in a higher risk for lenders and the inability of lenders to sell these loans in the secondary mortgage market. Mortgage fraud is a serious crime that can result in imprisonment up to 30 years.

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