Which is why banks do credit checks, ask for proof of income, bank statements, assets, expenses, request consent to verify employment etc.
This article sheds little light without asking the 28% that admitted to lying did the bank pick up on it. Ive sat with verification teams over the years doing process analysis. They regularly update application data, request further information and ultimately reject applications if the deal does not meet cashflow tests. I've seen additional debts identified by reviewing statements line by line and noticing regular repayment amounts.
My personal mortgage application understates my income as the broker did not include overtime or annual bonuses it goes both ways.
Of course not all in the industry play by the rules. You get dodgy brokers, bankers struggling to meet targets that will coach applicants to omit certain information like changing employers etc. If meaningful fraud that impacted serviceability was that widespread mortgage arrears would be much much higher. But hey lets not let facts get in the way of story.
