The New York Times had an interesting piece describing how one man has actually gone to prison for lying on his mortgage applicatons.
As we know, few people have been charged criminally for their roles in the mortgage mess, but this is not really the appropriate approach for prosecutors to take. Most people who took liar loans were saps for mortgage brokers who wanted to earn a commission.
I do not think that we will resolve this crisis by making it difficult for borrowers to seek workouts, absent real fraud on much bigger levels.
If you do find yourself in this situation, seek professonal advice. Please feel free to call me at 201-289-5352.