Non-Disclosure of Borrower Liabilities

Failure to disclose liabilities:

Borrowers may conceal obligations, such as mortgage loans on other properties or newly acquired credit card debt, in order to reduce the amount of monthly debt declared on the loan application. This omission of liabilities artificially lowers the which is a key underwriting criterion used to determine eligibility for most mortgage loans.

It is still considered fraud because it allows the borrower to qualify for a loan which otherwise would not have been granted, or to qualify for a bigger loan than what would have been granted had the borrower’s true debt been disclosed.

 

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