This is an activity that is done deliberately to misrepresent information in real estate documents. It also involves money transfers. Also called mortgage fraud. The reason it’s called that is because fraud usually occurs with the mortgage application. Real estate fraud, in the United States, can carry heavy penalties such as imprisonment and large fines.

Such a crime can be committed in many different ways. It seems to happen more often when property prices are on the rise. Due to the simplicity of the scam, some types are seen more often than other scams. Some are not as common because they are more complicated. One of the common forms of such fraud, according to the IRS, is preparing two sets of settlement statements that are different from each other. In one of the statements, the exact sale price of the property is written, which the buyer receives. The other will represent a higher sales price that is exaggerated. When the mortgage lender approves the loan for the inflated price, the seller receives the amount shown on their copy of the settlement statement. The one who committed the fraudulent settlement statements will keep the money that was left over. If there are other conspirators, the money will be divided among them. It could be all of the excess money or a percentage of it.

Using ratings that are fraudulent is another type of real estate fraud. These fraudulent ratings are used when applying for a mortgage or home loan to help them get the mortgage. In this form of real estate fraud, the real estate agent often helps the buyer. Fraudulent qualifications can include manufacturing credit reports or employment history. Both of these involve obvious data misrepresentation, but not all real estate fraud is as easy to see as these two examples. If buyers who do not intend to commit real estate fraud because they do not know the laws may accidentally commit mortgage fraud.

If a buyer has a down payment using money given to them as a gift, it is legal. If this gift is returned to the person who gave it, it is considered a case of real estate fraud. The gift used to make a down payment cannot be returned to be legal. Another type of property fraud is when the buyer accidentally fails to disclose any financial liabilities on their mortgage application. It becomes fraud when it is not taken care of before the loan is approved. The sale of property can become real estate fraud if you make false representations about the value and condition of the property when you sell it for a price that is much higher than what you paid for the property.