Finance
In Hawaii, 'mortgage fraud' includes which of the following?
AA. Providing accurate income information that results in loan approval
BB. Inflating a property's appraised value to obtain a larger loan✓ Correct
CC. Paying a higher price for a property than it appraises for
DD. Using a co-signer who is also a family member
Explanation
Mortgage fraud includes inflating property appraisals, falsifying income information, misrepresenting the intended use of a property, or other schemes to obtain loans under false pretenses.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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