Mortgage Fraud Surges 7.3% as One-Third of Investors Break Federal Law
Summary
Mortgage fraud is on the rise, and a significant portion of real estate investors are implicated, potentially jeopardizing their properties. Hosts should be aware of the different types of mortgage fraud and the risks associated with misrepresenting information during the loan application process.
Key Insights
- •The year-over-year trend for mortgage fraud in the first quarter of 2025 is up 7.3%.
- •One-third of all investors commit mortgage fraud.
- •Only 0.86% of mortgage applicants—about one in 116—carried the risk of mortgage fraud as of the second quarter of 2025.
Action Items
- ✓Hosts who have used a property as a STR and misrepresented the primary residence status on a mortgage should review their situation and seek legal counsel if they have any concerns.Effort: highImpact: high
Watch Out For
- ⚠Falsifying information on a mortgage application can have significant consequences, including the lender demanding full repayment of the mortgage or foreclosure.
- ⚠Using an FHA loan for owner-occupancy but renting the property out shortly after closing could be considered fraud.
Related News
Federal judge sides with homeowners against Clark County in ongoing short-term rental battle - ktnv.com
A federal judge sided with homeowners in their ongoing legal battle against Clark County regarding short-term rentals. This suggests potential legal challenges to local STR regulations, impacting hosts' ability to operate. Hosts in Clark County should stay informed about the legal proceedings and potential impacts on their permits.
America’s Most Famous Island Cracks Down on Short-Term Rentals, Slashing Thousands of Vacation Homes - Realtor.com
A famous island in the US is cracking down on short-term rentals, potentially slashing thousands of vacation homes. This could significantly impact hosts operating in the area. Hosts should monitor local regulations and consider the potential for reduced rental opportunities.
Central Okanagan Regional District to review short term rental rules in rural areas - West K News
The Central Okanagan Regional District is reviewing short-term rental rules in rural areas. Hosts in this area should be aware of potential changes to regulations. Stay informed and monitor for updates to ensure compliance.
New Research: The Rising Price of Hotel Tax Compliance
A new report highlights the increasing complexity and cost of tax compliance in the lodging industry, including short-term rentals. Hosts are spending significant time on compliance, and many lack confidence in their methods. Consider exploring AI-powered tools to streamline tax processes and free up time for guest experience and growth.