https://t.co/aEHdMooGev

Yes, people are fraudulently getting home loans and sometimes, even get away with it (the house too😅) A Thread

Here is Home Loan Fraud

Here is how you can get your dream house

Here we go:

South African jurisprudence has shown a consistent reluctance to reward engineered affordability. Where courts find that a lender was induced into a materially different risk position, the legal remedies are robust. Foreclosure is not merely a collections mechanism. It is a

The reason people believe they can “get away with it” is because enforcement is rarely immediate. Home loans are long-term instruments. Default may occur years later. But when it does, the underwriting history does not disappear. Digital audit trails are persistent.

There is also the belief that unless there is obvious forgery, consequences are unlikely. In practice, many disputes do not revolve around forged documents. They revolve around overstatement, omission, or structured presentation of facts that influenced the underwriting

Another misconception is that if both parties “benefit” at the outset, the borrower receives a home and the bank earns interest, misrepresentation somehow becomes diluted. That is not how contractual validity works. Materiality at inception governs legality, not short-term

In Absa Bank Ltd v Moore (CC, 2017), although the case centred on enrichment principles, the Constitutional Court reinforced the importance of lawful basis in financial transfers. Where benefit flows without proper legal foundation, restoration is the objective. Home loan

The idea that “if I pay for a few years, they won’t revisit origination” is also misplaced. In foreclosure proceedings, underwriting files are frequently reconstructed in detail. Courts review affordability models, disclosed income, valuation reports, and correspondence. Time

In bond enforcement matters involving affordability disputes, High Courts have consistently examined whether the lender would have granted the loan had the true facts been known. That counterfactual test is central. If the answer is no, rescission and enforcement follow.

In FirstRand Bank Ltd v Fillis (SCA, 2010), the Supreme Court of Appeal reinforced that material misrepresentation, even if layered within otherwise legitimate documentation, renders a contract vulnerable. The sophistication of the misrepresentation does not neutralise its legal

A common question I get privately is this: “But what if I structure it carefully? What if everything looks clean?” That assumption that careful structuring equals protection is exactly what South African courts have dismantled repeatedly.

South African jurisprudence over decades has demonstrated consistency in this area. Contracts induced by material misrepresentation may be set aside. Enrichment without lawful basis must be reversed. Security rights in property are enforced methodically. The system may move

The broader lesson is structural. Affordability is not an administrative formality. Deposits are not symbolic. Occupancy declarations are not decorative. They are central to the risk model on which the agreement is built. If those foundations are engineered rather than truthful,

Many participants in affordability manipulation do not initially perceive themselves as committing serious fraud. They perceive it as “bridging the gap.” The law does not recognise that distinction. Material misrepresentation that influences a credit decision remains legally

What makes home loan fraud particularly risky is not speed, but duration. These are long-term contracts. Interest compounds over decades. When enforcement mechanisms activate, the financial and legal impact is far heavier than short-term credit disputes. The paper trail in bond

The consequences are not abstract. They can include rescission of the agreement, foreclosure, cost orders, blacklisting, and in cases where intentional deception is established, potential criminal exposure under fraud statutes. The scale of home loans means the financial gravity

A common misconception is that if instalments are serviced for a period of time, early misrepresentation becomes irrelevant. That assumption is incorrect. When default occurs years later and enforcement begins, the original underwriting file is often reconstructed in detail.

Valuation inflation adds another layer of complexity. Where properties are sold between related parties or comparables are stretched to justify higher bond values, the loan-to-value ratio becomes artificially comfortable. If the market corrects or default occurs, the bank’s