What is mortgage fraud?

Mortgage fraud involves the act of misrepresenting information on a mortgage application, which can be done by either the borrower or the lender, with the intent of obtaining a financial benefit. This definition encompasses various types of fraud, including inflating income, misrepresenting assets, or lying about employment status. The key aspect is the intention behind the misrepresentation: it is aimed at gaining a financial advantage that would not be obtained if the truth were disclosed.

The other choices touch on aspects related to real estate transactions but do not capture the broader definition of mortgage fraud. While misrepresenting a property's value to secure a larger loan might be a part of mortgage fraud, it is just one specific tactic. Hidden fees in loan agreements, while potentially unethical practices, do not necessarily constitute fraud unless they involve deception regarding terms. Similarly, using a false identity to acquire housing could relate to mortgage fraud but is not the comprehensive definition of the term, which specifically focuses on the misrepresentation of information on the mortgage application itself.