DEFINITION of 'Mortgage Fraud'

Intentionally falsifying information on a mortgage loan application. The intention of mortgage fraud is typically to receive a larger loan amount than would have been permitted if the application had been made honestly.

BREAKING DOWN 'Mortgage Fraud'

In addition to individuals partaking in mortgage fraud, large scale mortgage fraud schemes are not uncommon. Mortgage fraud is such a serious problem that the United States Department of Justice and Federal Bureau of Investigation (FBI) initiated "Operation Malicious Mortgage". Penalties for mortgage fraud include fines, restitution and imprisonment up to 30 years.

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