Is it a crime for request a loan when your using money different than what you tell them?

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I mean you say anything to get loan even those it not all truth with lowest rates.

Example: you need to borrowed money to buy commercial building for investment reason, but you tell mortgage company that it’s a home that your gonna live in, but it’s not true and real reason.

Those example I am talking about, is that a crime? And what chance it can get prosecute for doing it?

Otherwise if you tell them 100 percent truth, you either will get rejected on loan or end up pay higher interest rate which cause your business to go bankruptcy.

2 Comments
  1. Reply
    exactduke
    May 16, 2011 at 3:33 am

    Yes, they tend to call that loan fraud. Not sure what the penalty’s are. Probably a fine. And if you make a habit of this jail time.

    Also there’s a 6 – 8 week underwriting process, which involves loan officers, bldg inspectors, realtor’s, etc. You think they’re not gonna pick-up on the fact that you said this was for a home & the address you gave is a commercial bldg?? Isn’t that a dead give away?? Loan officers aren’t dummies, scam attempts are not unheard of.

  2. Reply
    STEVEN F
    May 16, 2011 at 4:16 am

    Obtaining credit under false pretenses is FRAUD and is a crime. In the example you give, you won’t be prosecuted, but you won’t get the loan either. They WILL know the commercial property is NOT a home. a better example would be buying a property for rent and telling them you intended to live there. In that case, it is at least POSSIBLE for your claim to be true.

    Note: The terms of the loan WILL NOT cause the business to go bankrupt. buying a property the business can’t afford would be the cause of any bankruptcy. Don’t even try to tell me the business can’t survive without buying the property. If that is the case, the business is already dead.

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