Real Estate Council of Alberta Fundamentals Practice Exam

In what case would name manipulation be used in mortgage fraud?

1. To hide the existence of previous loans

2. To create a new credit record for individuals with bad credit

3. To falsely claim identity theft for loan forgiveness

4. To switch property names after a sale

The correct answer is: To create a new credit record for individuals with bad credit

Name manipulation in the context of mortgage fraud is typically employed to create a new credit record for individuals who have a poor credit history. This practice allows the individuals who engage in this fraud to present themselves as having a clean credit record, thus making them appear more attractive to lenders. By using different names or variations of their names, they can circumvent the negative implications of their past credit issues and potentially qualify for loans they would otherwise be denied. Creating a new credit identity effectively misleads lenders and contributes to the fraudulent nature of mortgage applications. This practice not only undermines the integrity of the mortgage lending process but also poses a significant risk to financial institutions and individuals who follow ethical lending practices.