I see examples of fraudulent occupancy reported on an occasional (but not constant) basis. In fact, one thing underwriters are now doing is asking/requiring appraisers to report if they suspect occupancy fraud on the properties they’re appraising.
Just a couple weeks ago I reviewed an appraisal that is located next door to a property for which I had reviewed another appraisal a couple months ago. Both appraisals were performed during the same week, for the same property owner, and both reported owner occupancy. The mailing address for that property owner is in Seattle. Now it’s obvious that the way occupancy is defined by the banks this borrower was attempting loan fraud on at least one of these loan applications, if not both.