You may not think it’s that big of a deal — and because both downpayment requirements and interest rates tend to be lower, it can be really tempting — but lying on your mortgage application, even little white lies, is not a good idea. Most often attempted during cash-out refinance, 19% of all mortgage representations to Fannie Mae in 2013 were “occupancy fraud”. That’s where the borrower states that he intends the property as his primary residence, but actually intends for it to be a rental or vacation property. Not only is this very costly to lenders, but Big Brother is watching. Both Lexus-Nexus and, more significantly, the Treasury Department’s Financial Crimes Enforcement Network keep tabs on such things.
