Mortgage fraud is back in the news. Lisa Cook, a Federal Reserve governor, is being investigated by the Department of Justice for allegedly making false statements when applying for a mortgage. Members of Donald Trump’s Cabinet are accused of similar wrongdoings. Could any of these people go to prison?

Mortgage fraud is not a new problem. Subprime mortgage fraud fueled the 2008 financial meltdown, when large numbers of very risky mortgages defaulted. Mortgage fraud was also a key feature of the savings and loan crisis in the 1980s.

Mortgage applications are very long, so there’s plenty of opportunity to make mistakes. Plus, they require borrowers to declare that everything is “true, accurate, and complete.” Misrepresentation can trigger potentially large civil and criminal penalties.

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