BROWSE

Occupancy Fraud

What is 'Occupancy Fraud'

A type of mortgage fraud, whereby the borrower lies about whether or not the home will be owner occupied. Occupancy fraud happens when the borrower says that a home will be owner occupied, when in reality it will not be. Mortgage lenders typically offer lower rates to mortgages on owner-occupied homes, rather than investment properties. When occupancy fraud occurs, banks take on too much risk because they are receiving a lower interest rate than they should be for the delinquency risk that exists.

Explaining 'Occupancy Fraud'

Lenders typically charge higher rates on mortgages for non-owner occupied homes, because of higher delinquency rates. Delinquency rates are often lower for the owner-occupied home because people do not want to lose their private residence and become homeless. There is a lot less attached to losing an investment property.


Further Reading


Owner occupancy fraud and mortgage performance
papers.ssrn.com [PDF]
… occupant being a fraudulent investor … owner occupants and declared investors imply that the fraudulent investors' mortgage defaults may have been strategic … demonstrate one important role that occupancy fraud played during US housing boom and bust. Page 18. 17 …

Ten Years of Evidence: Was Fraud a Force in the Financial Crisis?Ten Years of Evidence: Was Fraud a Force in the Financial Crisis?
papers.ssrn.com [PDF]
… occupant being a fraudulent investor … owner occupants and declared investors imply that the fraudulent investors' mortgage defaults may have been strategic … demonstrate one important role that occupancy fraud played during US housing boom and bust. Page 18. 17 …

The social ecology of speculation: Community organization and non-occupancy investment in the US housing bubbleThe social ecology of speculation: Community organization and non-occupancy investment in the US housing bubble
journals.sagepub.com [PDF]
… occupant being a fraudulent investor … owner occupants and declared investors imply that the fraudulent investors' mortgage defaults may have been strategic … demonstrate one important role that occupancy fraud played during US housing boom and bust. Page 18. 17 …

Mortgage origination fraud and the global economic crisis: A criminological analysisMortgage origination fraud and the global economic crisis: A criminological analysis
onlinelibrary.wiley.com [PDF]
… occupant being a fraudulent investor … owner occupants and declared investors imply that the fraudulent investors' mortgage defaults may have been strategic … demonstrate one important role that occupancy fraud played during US housing boom and bust. Page 18. 17 …

Tunneling, Fraudulent Financial Statements and Regulation Effects: Chinese EvidenceTunneling, Fraudulent Financial Statements and Regulation Effects: Chinese Evidence
www.tandfonline.com [PDF]
… occupant being a fraudulent investor … owner occupants and declared investors imply that the fraudulent investors' mortgage defaults may have been strategic … demonstrate one important role that occupancy fraud played during US housing boom and bust. Page 18. 17 …

A Relationship Among Neighborhood Traits, Home Sales and Mortgage Fraud: The Atlanta Market Leading Into the Mortgage Crash of 2008A Relationship Among Neighborhood Traits, Home Sales and Mortgage Fraud: The Atlanta Market Leading Into the Mortgage Crash of 2008
scholarworks.boisestate.edu [PDF]
… occupant being a fraudulent investor … owner occupants and declared investors imply that the fraudulent investors' mortgage defaults may have been strategic … demonstrate one important role that occupancy fraud played during US housing boom and bust. Page 18. 17 …

An Insight into the World of Mortgage Fraud in the US and UKAn Insight into the World of Mortgage Fraud in the US and UK
search.proquest.com [PDF]
… occupant being a fraudulent investor … owner occupants and declared investors imply that the fraudulent investors' mortgage defaults may have been strategic … demonstrate one important role that occupancy fraud played during US housing boom and bust. Page 18. 17 …

Fraudulent income overstatement on mortgage applications during the credit expansion of 2002 to 2005Fraudulent income overstatement on mortgage applications during the credit expansion of 2002 to 2005
academic.oup.com [PDF]
… occupant being a fraudulent investor … owner occupants and declared investors imply that the fraudulent investors' mortgage defaults may have been strategic … demonstrate one important role that occupancy fraud played during US housing boom and bust. Page 18. 17 …


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