4 ms·

How is this not fraud?

• mc3 7y ago
  If a bank agrees to lend you $1M against your $500k house, and you are completely honest with them about your earnings (say $50k/year), send legit paperwork etc. then you accept the loan (even though you know it's "too much"), is that fraud?
  • rubbingalcohol 7y ago
    If you borrow money knowing you can't or won't pay it back then yes, it's fraud. But it's more complicated in this case, because the dude could argue he expected major gains and believed there was no way he could lose.
    • mc3 7y ago
      Yes, but "the dude can argue" can apply to the house example. "I planned to rent out the rooms". "I planned to get a better job". "The house is worth $1M to the right buyer", etc. If someone lends you money on the basis of honest information you present to them I don't see how it is fraud. It might be unwise to take such loans, but that's a different thing.