See: Mortgage.
It was pretty shocking when our Aunt Maude was led away in handcuffs this morning after being arrested for mortgage fraud. It turns out that the only reason she got that awesome new house she’s been living in is because she falsified a bunch of documents to get approved for the big loan amount she needed. Since she’s been able to make the monthly payments, Aunt Maude didn’t really understand what the big deal was, but here’s the big deal: it’s fraud, Maude, and fraud is illegal.
“Mortgage fraud” involves profiting illegally from some aspect of the mortgage business, whether we’re a buyer like Aunt Maude, a lender like Aunt Maude’s bank, or anyone in between. And if we’re found guilty of mortgage fraud, we could be looking at ginormous fines and up to 30 years in jail.
So what exactly constitutes mortgage fraud? Basically...any lies we tell, any information we falsify, or any bribes we pay in the name of garnering illegal mortgage-related profits will qualify us for the slammer. Or at least some heavy fines. Like...maybe we fib about our income (like Aunt Maude) to get a loan, or maybe we say we own some assets that we don’t really own. Or maybe we bribe some folks to say the house we already own is worth way more than it is so we can get approved for a refi. Maybe we buy a house and say we’re going to rent it out (hello, tax benefits), but instead of renting it, we live in it with all of our cats. Maybe we charge some poor unsuspecting folks a ton of money to help them avoid getting their houses foreclosed on…but then we take the money and run away to Mexico and let their houses foreclose anyway.
Whatever it is, if it involves a mortgage and we’re lying or being otherwise shady about it, it just might be considered mortgage fraud.
Related or Semi-related Video
Finance: What is Interest Only Mortgage?17 Views
Finance allah shmoop what is an interest only mortgage Well
simply put it's when you only pay the rent on
the dough you borrowed you don't pay down the principal
you owe like if you have a three hundred thousand
dollars mortgage at six percent interest you're paying eighteen grand
a year to rent that money in six percent times
three hundred rands eighteen grand a year But the principal
you borrowed is likely due in thirty years So in
theory anyway if it were a normal mortgage you'd want
to pay down the principal little bit a month as
you go along like averaging ten grand a year in
principle pay down over thirty years That's times ten grand
right three hundred grand their total owning your home at
the end yeah yeah priceless that's what holmes work So
why would you want an interest only mortgage Well for
one thing the monthly payments or less so maybe you
could afford morehouse If on a thirty year three hundred
thousand dollar loan at six percent you're paying interest only
while you're writing a check each month for eighteen thousand
divided by twelve or fifteen hundred bucks maybe that's all
You can afford well the extra five hundred bucks arm
or you'd right toe pay down your principles Just not
something you can really do right now Maybe after three
years of scrimping and saving well you'll be able to
start paying down that principal reducing risk and making life
easier all the way around But right now you can't
afford it so the only thing you can do is
do the interest only dance Well the other reason you
might want an interest only mortgages that interest costs are
tax deductible Principal pay down costs are not so if
in a given mortgage payment of say eighteen hundred bucks
a month where three hundred of it is principal pay
down and fifteen hundred of it is interest well on
ly the fifteen hundred is tax deductible That three hundred
of pay down is not And if you're a forty
percent taxpayer the government is essentially picking up the tax
savings on the fifteen hundred times a forty percent at
six hundred dollars in interest You're paying such that they
quote feel unquote like the fifteen hundred is really only
about nine hundred a month in cost to you the
three hundred bucks and principal paydown feels like a full
three hundred dollars So some people seeking tio optimize their
tax deductions live in the world of interest only mortgages
and let the government for a change You know work 00:02:26.24 --> [endTime] for them How's that feel same all Take it
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