Humber/Ontario Real Estate Course 4 Exam Practice

How is a major mortgage fraud scheme usually executed?

1. By one individual.

2. By a mortgage company employee.

3. Involving multiple individuals.

4. Without involving overvalued real estate.

5. By solely manipulating bank statements.

6. By inflating income levels artificially.

The correct answer is: Involving multiple individuals.

A major mortgage fraud scheme is often executed involving multiple individuals because such schemes typically require a collaborative effort to manipulate various aspects of the mortgage process. This might include collusion between appraisers, mortgage brokers, real estate agents, and even borrowers to create a façade that appears legitimate to lenders. The complexity and scale of these frauds often necessitate the expertise and participation of various parties, making it more difficult for any one individual to undertake without assistance. In these schemes, individuals may work together to inflate property values, fabricate documents, or mislead lenders about a borrower's financial situation. This collective involvement helps in designing more sophisticated schemes that can evade detection for longer periods. By relying on a team, fraudsters can share the risk and responsibilities, thereby complicating the investigation for authorities. Other options listed, such as manipulating bank statements or inflating income levels, may be tactics used in these schemes but don’t capture the broader picture of how such frauds are commonly organized. While these activities can be performed by an individual or a single party, the scale and execution of major mortgage fraud typically necessitate a network of individuals working in concert.