On paper, one couple’s income ballooned by $57,000. An engineer at a consulting firm suddenly had $31,000 more a year, while a medical assistant was pulling down $61,200 in annual salary.

Somewhere between pre-application and application, these mortgage borrowers got a whole lot wealthier.

The Massachusetts Division of Banks recently accused Pembroke-based Mortgage Funding Corp. of inflating mortgage applicants’ income, as well as a host of other charges. Those specific income misstatements took place in 2005-2007, before a wave of regulation drastically changed the mortgage game in 2008 – but the division’s recent inspection rooted out some familiar dirt.

But officials are still seeing the same types of fraud that increased oversight was intended to stop, said division chief operating officer David Cotney. Old tricks, such as white-out on W-2s and falsified verifications, are still in play.

“It may be harder to do, but they’re finding ways,” Cotney said.

Cease-and-desist orders went out in late March for two Massachusetts companies, as well as notice of a hearing for a Maryland-based lender and broker that did business in Andover.

Mortgage Funding Corp. and Woburn-based Abbott Mortgage Corp. were both ordered to stop operations immediately for a variety of violations, some of which were ongoing at the time of the 2008 inspection. The companies have 20 days to contest the findings, or the cease-and-desist orders become permanent.

Abbott did not misstate borrower income, but both Massachusetts companies were cited for a number of problems, including reproducing applicants’ signatures without their knowledge, using misleading advertising to portray themselves as lenders when they were only brokers, and advertising they were able to get borrowers a loan regardless of credit history and income.

Abbott also allegedly altered consumer documents, including cutting borrowers’ signatures from copies of original loan documents and pasting them onto other forms that were then submitted to the lender.

The owner of Abbott Mortgage, Semyon Karasik, answered the phone at his business, but said he had stopped doing all mortgage brokeraging business. He acknowledged he had violated broker regulations, but still wants to defend himself in a hearing against the division of banks.

“I agree [there were] violations, but it wasn’t for the damage of the client,” he said. “I am trying to say that it wasn’t for the purpose of cheating people out of money.”

Maryland-based Castle Point Mortgage was also given notice of a hearing relating to 11 different types of infractions, including misstating borrowers’ income and charging improper fees.

Shock And Awe

Mary Marengi, senior vice president with Cambridge Mortgage Group, said it would still be tougher to get away with inflating income: “I’m surprised that people can even do that in this environment.”

Ditto with advertisements that promise loans regardless of borrowers’ credit. With credit writing so tight these days, companies don’t often make that promise, she said. However, Marengi said, some might still offer out those promises because “it gets the phone to ring.”

Mortgage Funding Corp and Abbott both overstepped their bounds in using advertisements that made it sound like applicants’ bad credit wouldn’t present a barrier to getting a loan, according to the division’s findings. Mortgage Funding’s Web site contained statements such as, “We won’t let your past stand in the way of your future” under the heading titled “Less than perfect credit.”

Castle Point’s phones were disconnected, but Mortgage Funding Corp.’s Web site and phones still appeared operational as of last week, although no one from the company returned calls by press time. Cotney said Mortgage Funding Corp. had told the division that it would contest the findings.

The owner of Abbott Mortgage, Karasik, said he’d let his brokerage license lapse at the close of 2008 because he was waiting for the results of the November inspection.

Karasik declined to speak more specifically about the violations, saying he preferred to discuss them with the division.