Mortgage fraud occurs when individuals or entities deceive lenders to obtain a loan under false pretenses. This can involve misrepresenting income, assets, or the value of a property to secure a mortgage that the borrower may not qualify for. There are various types of mortgage fraud, including income fraud, where borrowers inflate their earnings, and property flipping, where properties are bought and sold at artificially high prices. Such fraudulent activities can lead to significant financial losses for lenders and contribute to broader economic issues, such as housing market instability.