Can you lie to lending officer?

Question

Can you lie to lending officer regarding existing seller financing loan that I had and not telling them to applying for mortgage pre-approval. Four years ago, I bought a mix-used building using seller finance and I have only one year left of mortgage to pay off. Recently, I want to buy a multi-family and so I went to bank apply for mortgage pre-approval. Yesterday, she told me that the underwriter is wondering what happened to the home I used to own that I have mortgage interest on my tax return, but she didn't see a mortgage on my credit report. Do I have to tell her the truth? I'm afraid that she might denied my application because of the mortgage loans I have to pay compared how little income I earn.

John Burtle · Answer

You're asking if you can lie? Eh, this isn't going to end well. Don't ever lie. You're asking if you can violate federal laws......on a public forum.

Chris Mason · Answer

Hi KC,Welcome to BP, glad to have you!Friendly reminder that this is a publicly searchable forum. Your mom can find this post. So can your local district attorney, and the FBI.And your underwriter. Yup, they are allowed to use google to help them do their jobs.

Daniel O. · Answer

@Kenny Chen Yes, absolutely, you can and should lie to the loan officer. The problem here is that you are also paying income taxes, and they found a discrepancy between what you said on one official government document and what you are saying on another government document. The solution is to stop paying your income taxes too. There may be other ways they can find out about your other property. Utility bills are always a problem in this regard. You should have all the utility services turned off. Immediately. For electricity, you can just take some jumper cables and clip on to the transformer directly. Use a 5 gallon bucket to catch rain so you have water. Unfortunately, as others on this forum have pointed out, you have posted on a public forum which can and will be searched. And you have posted your picture with it. Oops. Consider changing your appearance too. Maybe a blond wig? Don't get too attached to the wig though, as they may not let you keep it when they catch you and arrest you for felony fraud and income tax evasion.If all of this sounds like a big hassle, you might consider taking the easy way out and just telling the loan officer about the other loan. This is the course of action I recommend. If they won't loan you money because of the other loan, they probably think you will have trouble paying both loans. Really look over your finances and figure out whether they are in fact correct. If you can make the case to yourself, you may be able to make the case to them. If not, they may actually be doing you a favor by keeping you from getting in over your head.

Upen Patel · Answer

@Kenny Chen You most certainly can try to lie to a loan officer, but we will find out. :-) As you are finding out the hard way.I would have caught this before it ended up with underwriting, but not exactly the best loan officer you are working with. There are many many checks and balances in place (most which folks don't know about) to catch nefarious folks like you.

Kenny Chen · Answer

@ Daniel Odess Thanks for the advise! It's also funny lol. I am planning telling her the truth in the first place. Thanks alot!!! :)

Kenny Chen · Answer

I wasn't going to anyway, just want to know if I would get in trouble if I do. Thanks everyone advises! John BurtleJohn BurtleJohn BurtleJohn BurtleJohn Burtle

Chris Martin · Answer

The Simpsons season 2. "Remember: Lie, cheat, steal, and listen to heavy metal music." the Devil.

Scott Buchholz · Answer

@Kenny Chen Of course you can lie to the Loan Officer, this happens all the time and you wouldn't be the first. Just keep in mind it's not the Loan Officer that is going to deny your loan, as the Loan Officer is simply the face of the bank that you're talking to (people always forget this and blame the LO,) if you're loan is denied it's because of the Underwriter. What you have is a pre-approval letter, which is 5C's based. If you are able to receive a Commitment letter, read it very closely as the Underwriter is going to add a condition to your loan, requiring a full disclosure of the property you don't want them to find out about. When you go the route of applying for a loan through a traditional bank, keep in mind the Lender follows TILA to the T. The 2 questions I would ask you, is how badly do need this loan? Are you sure, you are going to right type of lender for your situation?