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Mortgage fraud allegations rise in Illinois

Mortgage fraud cases are on the rise in Illinois, especially as more people try to enter the housing market, according to one report. Home prices are growing while mortgage lenders' practices have become more restrictive since the 2008 financial crisis. This was originally sparked by failing home mortgages and widespread banking practices that encouraged repeated investments in the success of those home loans.

According to CoreLogic, in the 12 months ending in the second quarter of 2018, there was a 12 percent rise in mortgages with false or fraudulent information. This takes into account applications across the country. In the second quarter of 2018, one out of every 109 applications contained false information, the report said. At the same time in 2017, only one out of every 122 applications had fraudulent material. In Illinois, however, the increase amounted to 33 percent, one of the largest spikes in the country. In addition, Illinois was cited as one of the 10 locations where mortgage fraud is most common.

Mortgage fraud allegations most frequently derive from people allegedly inflating their income when applying for a mortgage. Some people go a step further and have a fake employer verify the falsely high number. In other cases, a person may fail to provide information about additional mortgages on other properties. Due to the popularity of Chicago real estate, there are also many out-of-state investors buying property. It is more difficult to verify the information of buyers from other states, so this can also increase the risk of fraud.

Mortgage fraud allegations can hit hard, especially if a mortgage broker encouraged misrepresentations during the process. Someone who is accused of fraud for misstating their income when applying for a home loan can work with a criminal defense attorney. A lawyer can challenge prosecution assertions and work to avoid a conviction.

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