Back in late 2006 I was looking to purchase a small rental property. I initially agreed to purchase a 4-unit building but then backed out after an inspection revealed it to be in poor condition. I signed up with a mortgage broker and would have used her had I gone through with the purchase. We got so far as to look over and sign the good faith mortgage estimate. What I found there surprised me. The broker had pre-filled our answers, which was fine, as I had given her all the correct information. However, I found that our income had magically jumped from $35,000 for the prior year to $83,000. My wife and I were both in graduate school at the time so this was obviously not true. Also, although it was to be a rental building, the broker had checked the box saying that we would live there, contrary to what I had said multiple times.
If I had not read the document carefully I would have inadvertently committed felony mortgage fraud.
See the offending documents (personal info redacted).
The mortgage broker I worked with was Home Loan Experts (now defunct), which was a subsidiary of Golden West Financial, now part of Wachovia.