Tuesday, April 15, 2025

"I wish there was just some way to hide all these student loans somehow!" "That's mortgage fraud."

 

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"I wish there was just some way to hide all these student loans somehow!" "That's mortgage fraud."

"I wish there was just some way to hide all these student loans somehow!" "That's mortgage fraud."

I was working on getting a home loan in the next town I was moving to after college. Adam at my bank, the loan originator, told me in a friendly tone and with a friendly facial expression, that I owed $106,000 in student loans (in 2013) so I'd need to make a minimum of $50,000 in a career related to my major to qualify.

(In 2025, I only owe $15,000 now, fortunately.) I tried to convince him that I could keep the loans in deferment indefinitely for as long as I kept taking a minimum of 6 credit-hours every semester at any college I choose. I planned to do so until a new legislation abolished student loans and made public college free, or until an apocalyptic event wiped them away, or until a new miracle technology made me earn more than ever before. (Doordash was that technology; the gig I joined in 2020.) That wasn't enough to overturn his denial decision.

When I told him "Man, I wish there was just some way to hide all these student loans somehow!," he told me "That's mortgage fraud."

That threw me off my train of thought. If I held on tighter, I would've said "You sure make this sound more serious than it feels! So how serious is this 'mortgage fraud' anyway? Like, what are the penalties and all that?"

So what would the fallout have been if anybody looking for a home loan hid (or tried to hide) their student loans?

 

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[–]Minn-ee-sottaa 5 points  

Specific always controls over general. Similar facts under similar laws result in similar decisions in the interest of fairness.

Why would a court ever apply your general (and incorrect) reading of necessity/duress, instead of the laws around mortgage fraud that are far more relevant for the situation?

[–]dreamingforward 1 point  

And natural (or Constitutional) rights override your "general" laws, yes? Don't you dare say my "reading of necessity/duress" is incorrect unless you're a lawyer. You do the right thing and say "In my opinion of the law" OR if you want to go above the written law and defer to philosophy generally, you can say "in my interpretation of what the law SHOULD be in the interest of Justice as America was founded upon..." (unless you're a Doctor of Philosophy).

[–]Minn-ee-sottaa 1 point  

I am a lawyer.

[–]marcoroman3 4 points  

His "lying" was to get around an obstacle that was a matter of bank policy -- not a real risk

It is a real risk though. That's why they have the policy. In any case it's the right of the lender to determine what they consider to be a risk.

[–]dreamingforward 0 points  

It's not real: the banker is hypothesizing the risk based on a model in his head that is applied to everyone. But I said, in this case, he's going to pay the mortgage, so there's NO risk -- it's just the banks can't tell with their overly simplistic model.

And you are not correct that banks (lenders) have the "right" -- it's America's money. The banks were given the money from the lender called "America". America has the "right" to tell banks how to assess risk when giving out OUR money.

[–]Dakk85 14 points  

I know this is legal advice not financial advice but…

You paid off 91k in 12 years and then decided to stop with only 15k left (2 years at the rate you were going) to then try and enter indefinite deferment by taking (and presumably paying for) college classes every semester until the loans get forgiven?

Are you taking classes for a purpose like a specific degree or just kicking the can down the road but cause if it’s the latter I’d say it will be much easier and cheaper in the long run to just pay them off

[–]spankymacgruder 2 points  

You can't hide them. Even if you could, the UW would probably find them.

What's the worst outcome?

Prison

[–]terrymr 1 point  

This is basically what Donald Trump was convicted of.

[–]marcoroman3 1 point  

It's not real: the banker is hypothesizing the risk based on a model in his head that is applied to ever in this case, he's going to pay the mortgage, so there's NO risk

The bank doesn't know what he is going to do. They need to take decisions based on a statistical model. Are they supposed to base their decisions based on what people say they will do?

 

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