Mortgage fraud investigations are structured efforts to look into the circumstances surrounding a specific mortgage or group of mortgages. Investigations of this type are sometimes conducted by professionals within the mortgage industry, but may also be managed by governmental or law enforcement officials if the fraud investigation is suspected to involve a large-scale operation. Mortgage fraud investigators seek to identify the origins of any factors that appear to be outside the scope of legal mortgage transactions, and determine if there are any indications of an attempt to commit fraud. When proof of mortgage fraud is secured, it is not unusual for the investigators to provide the evidence to law enforcement officials who can then take the steps necessary to pursue the matter.
The scope of mortgage fraud investigations can vary from looking into questionable data regarding a mortgage debtor to investigating the business practices and transactions of a mortgage lender. When looking into the circumstances around a mortgage granted to a debtor, the focus of the investigation will often be on determining if incorrect data was intentionally provided to the lender, or even if relevant data was omitted from the information provided by the mortgage applicant. In many nations, the willful submission of inaccurate information in order to profit from a business transaction is considered fraud, and would make the debtor open to prosecution for his or her actions.
In like manner, mortgage fraud investigations can also focus on lenders. This is sometimes the case when complaints from former customers indicate that something about the way the business operates is not in compliance with industry standards and governmental regulations. In this scenario, the investigations are sometimes conducted by federal law officials who are charged with the task of overseeing any apparent irregularities in how mortgage lenders are operating their businesses, including the terms and conditions they include in their mortgage contracts. When and as necessary, local law enforcement may be involved during the course of the investigation, with all officials required to conduct their efforts in accordance with current laws.
Not all mortgage fraud investigations result in identifying the presence of mortgage fraud. At times, the investigations may uncover evidence that errors were made without any attempt to defraud. When this is the case, fines or other penalties may be in order if the circumstances merit this type of action. As with the methods used throughout the mortgage fraud investigations, any type of punitive action resulting from those investigations must be determined in accordance with currently applicable laws.
