As long as you are not understating any type of income - and I am taking vary broad view here - - and you are not, overall, defrauding the US Treasury.  

What talent, hard work and discipline it has taken you to be in the NFL--and that's understating the whole of it.

The trust doctrine can apply even though the arrangement does not constitute a trust under state law.

The impact of being a cash buyer in real estate cannot be understated.

MarcCapEx is not an operating expense so the NOI is understated. 

Many advertised cap rates on properties being marketed are overstated because income is overstated or expenses are understated, but this is not because there is anything wrong with how cap rates are calculated.  

Understating vacancy is one way that sellers use to do both at once.

Since the rehab numbers are typically understated, the buyers end up exiting the deal with very little profit.As Rigo says, their is always a new batch of investors out there willing to pay top dollar.    

The wholesales have a tendency to under state the repairs , making a house in the 75% to 80% range really a house in the 80 to 90 per cent range .  

I got an email from another vendor that some agents have been using these terms and other flavorful ones lately and we shouldn't.In fair housing, this issue comes up under steering and blockbusting.