Fraud

Question 1

Actual Fraud

Answer 1

Intent to deceive

Question 2

Actual Fraud

Answer 2

Intent to deceive

Question 3

Constructive Fraud

Answer 3

Unintentional; result of carelessness

Question 4

Fraud for Housing

Answer 4

when a borrower is misrepresenting assets, undisclosed obligations, income

Question 5

Fraud for Profit

Answer 5

Insider fraud with the intent to secure fraudulent loans

Question 6

Penalties under fraud

Answer 6

Up to $1,000,000 and/or 30 years in prison

Question 7

Straw Buyer

Answer 7

Involves an individual who “borrows” another’s identity to receive a home loan; Poster boy

Question 8

Property Flipping

Answer 8

Occurs when a resale of the home involves misrepresentation (ex. inflated appraisers)

Question 9

Loan Flipping

Answer 9

Coercing a borrower to repeatedly refinance a loan in order to charge high points and fees each time with no benefit to the borrower; Results in Equity Stripping

Question 10

Churning

Answer 10

When a mortgage broker and borrower work together work together to repeatedly refinance a property. Each time the borrower takes a rate with lender credit to make a “free loan”. The broker gets the commission which he splits with the borrower

Question 11

Churning

Answer 11

When a mortgage broker and borrower work together work together to repeatedly refinance a property. Each time the borrower takes a rate with lender credit to make a “free loan”. The broker gets the commission which he splits with the borrower

Question 12

Constructive Fraud

Answer 12

Unintentional; result of carelessness

Question 13

Fraud for Housing

Answer 13

when a borrower is misrepresenting assets, undisclosed obligations, income

Question 14

Fraud for Profit

Answer 14

Insider fraud with the intent to secure fraudulent loans

Question 15

Penalties under fraud

Answer 15

Up to $1,000,000 and/or 30 years in prison

Question 16

Straw Buyer

Answer 16

Involves an individual who “borrows” another’s identity to receive a home loan; Poster boy

Question 17

Property Flipping

Answer 17

Occurs when a resale of the home involves misrepresentation (ex. inflated appraisers)

Question 18

Loan Flipping

Answer 18

Coercing a borrower to repeatedly refinance a loan in order to charge high points and fees each time with no benefit to the borrower; Results in Equity Stripping

Question 19

Air Loan

Answer 19

A loan in a fictitious property

Question 20

Churning

Answer 20

When a mortgage broker and borrower work together work together to repeatedly refinance a property. Each time the borrower takes a rate with lender credit to make a “free loan”. The broker gets the commission which he splits with the borrower

Question 21

Silent Second

Answer 21

A 2nd position mortgage that is not disclosed to the 1st mortgage lender and is not recorded until after the 1st mortgage has been recorded

Question 22

Asset Renting

Answer 22

A borrower engages in a service that allows them to rent assets temporarily to appear more qualified to the lender; Ex. Borrowing money for a period of time to seem more qualified

Question 23

Shotgunning

Answer 23

Doing multiple loans on a property with multiple lenders

Question 24

Straw Seller

Answer 24

A person that is hired to take title to sell a home in name only to conceal the identity of the actual seller