There are several types of mortgage fraud schemes. The most common investor fraud schemes are different types of property flipping, occupancy fraud, and the straw buyer scam. Property flipping is not illegal when associated with buying a house, fixing the house, and reselling it for a profit. This process becomes illegal when a property is bought below market value and immediately sold at a profit with the help of a corrupt appraiser, who verifies the value of the property at a value that is much higher than the initial purchase amount.

Occupancy fraud occurs when a borrower claims that a home will be occupied by the owner in order to obtain a favorable loan. However, the property is not occupied and instead remains vacant. These schemes usually result in lower out-of-pocket costs on purchases made by investors and lower mortgage rates. Similarly, a straw buyer uses his or her identity credit and income to obtain property for another buyer who may not qualify. Straw buyers are usually investors who either willingly or unknowingly act in a manner that covers up other forms of fraud.

The most common mortgage fraud schemes committed by individuals are identity theft and income and asset falsification. Identity theft occurs where the buyer obtains the financing using an unwilling or unaware victim’s personal information. This information may include the victim’s Social Security number, birth dates, addresses, stolen pay stubs, bank records, tax return, and falsified employment verification letters. In some cases, property ownership may be falsified, and a borrower can obtain a fraudulent mortgage on a property that he or she neither owns nor occupies. A skilled mortgage fraud attorney in New York can navigate you through the legal process and ensure your rights are fully protected.