More and more I am hearing both clients and creditors throw out the “F” word.  Just like in any other situation, this is a bad word.

The word I am hearing is not what normal society considers the “F’ word.  It is the word fraud.

Plenty of creditors toss out the word fraud without even accusing anyone of committing the act or having a reason to bring it up.  It has become a buzz word rather than a term to be worried about.  I am not sure if the reason is because so many defaulted borrowers commit fraudulent acts without knowing they are making terrible mistakes, or  that the creditors are now numb to it and do not pursue the perpetrators all the time as there is hardly anything to gain through the legal attack of such guarantors, or if it is simply no longer a concern other than a term to use as a tool to dig up more cash from places they should not have access such as retirement and other protected assets, but I find it to be a trend.  Many people commit different forms of fraud accidentally, through unknown technicalities or lack of reading the fine print in the original contract and even more commit the act directly, while being emotionally, rather than logically driven.  If people hear the creditors using the term with such abandon,  it could become a serious issue as the less a word is given importance, the less the act it represents is respected.

Look at how teens and children learn about other taboo items earlier and earlier and what that leads to?  The child who has parents who swear constantly and ignore the violence or sex that is on their favorite shows when the child in is the room lessen the importance of those items in their child’s eyes.  Humans learn through action as much as through words and creditors are doing guarantors and themselves a great disservice.  I am not advocating that creditors attack guarantors, I am all for leniency to the people that did not intentionally defraud anyone.  I am however, saying that when the word is used, it should have importance as the dangerous act it is.  Guarantors should not even be contemplating fraud as a choice and should be much more hesitant to take actions which could result in fraud without getting an expert to let them know if such is the case.

The one silver lining to this behavior is it has started to humanize a bank’s actions when regarding the matter even if the thinking behind those actions is logical and not emotional.  The lessening of importance does not mean that the lender is going to let fraud go, but luckily for a client who I was working with it did allow the creditor involved to work with our plan and save my client from serious complications.  The actual act of fraud was one which came about as an act of desperation, rather than malicious intent and when Second Wind learned of what this client had done, we immediately went to the lender and provided full disclosure.  We presented the facts to the banker in the light they should be seen in and because these institutions are driven by cash, which our work would provide and because of this new trend regarding the act itself, our client was able to continue with the process.  The outcome would not have been possible without this lack of importance, and by no stretch of the imagination does it mean anyone else will get this lucky, but this one time it was one of the factors which saved a client who really just did what they thought they had to for the sake of their business.

Stick to the facts, use the numbers to help your situation and listen to the advise of experts.  You hire them for a reason.  Full disclosure and supporting documentation trumps misrepresentation or sneaky maneuvers every time.