FreddieMac.com
Skip to content
March 17, 2015

Life, The Unexpected and Mortgage Applications

Homeownership

Life, The Unexpected andMortgage Application -

If you're applying for a mortgage when life happens, tell your lender. One of the most important red flags lenders and their quality control teams' look for are discrepancies between the information on the original loan application and the borrower's circumstances when it's time to close the loan.

Significant life changes affecting employment and debt, for example, could signal fraud and cause the lender to postpone or cancel the settlement in order to evaluate the new information. (Borrowers must sign a legal affidavit at closing attesting to the truth and accuracy of the information in the loan application.)

One of the current top fraud flags: borrowers whose employment situations at closing are different than the ones they put down on the original applications. In many cases, the borrowers changed jobs but were otherwise gainfully employed and still qualified for the loan. Another common flag involves undisclosed debt because after the mortgage was approved the borrower ran out and bought (and financed) a new car.

Keeping loan officers up to date on job changes, new debts and similar changes since the original application ensures the mortgage process is transparent and the borrower is still able to qualify for a loan they can afford to repay.

Read other posts in our Spring Homebuying series.

Want to receive our weekly blog round up? Subscribe at the right – and each Friday we'll send you our latest blog posts.

  • Feedback

    Have a comment or question about this post? Email us to let us know what's on your mind.

    Maximum of 250 characters.