Ongoing affordability challenges and tougher mortgage qualification rules have homebuyers turning to alternative lenders, but some are also turning to alternative facts.
Arecent survey by credit monitoring service Equifax suggests there is a growing acceptance of fudging the numbers on mortgage applications, especially among younger house hunters. Nearly a quarter of the millennials (23%) surveyed believe it is acceptable to inflate income on a mortgage application. That is nearly double the rate (12%) for the overall population. Nineteen percent of the millennials surveyed actually admit to falsifying their application.
The survey also suggests 53% of consumers believe mortgage fraud is a growing problem. But there are indications there may be a misunderstanding of what constitutes fraud. Among those surveyed, 51% indicated it was most likely to be committed by organized crime. That number climbs to 56% among millennials. At the same time 16% of respondents called mortgage fraud a victimless crime. For millennials the number jumps to 23%.
The numbers would seem to suggest that many people do not see a “little white lie” on a mortgage application as fraud or a real crime. While it is unlikely any consumer is going to go to jail for “fiddling the numbers” on their mortgage application – as Equifax points out – getting caught in a lie, or becoming over extended because of a falsified document can have long lasting effects on a consumer’s credit rating.