In a fraudulent second lien scheme, the conspirators typically do which of the following?

In a fraudulent second lien scheme, conspirators often engage in assuming a homeowner's identity to take out a loan. This practice typically involves obtaining personal information about the homeowner to create fraudulent documents or to impersonate the homeowner when applying for loans. By doing so, the fraudsters can secure additional financing against the property without the homeowner's consent or knowledge, often leading to significant financial harm for the victim.

The other options suggest different actions that, while potentially relevant in various forms of fraud, do not specifically address the mechanics of a fraudulent second lien scheme. Encouraging homeowners to take out loans may be a tactic used in other types of schemes but is not inherent to fraudulent second liens. Increasing the homeowner's equity could imply legitimate transactions that do not align with fraudulent activities. Providing legitimate appraisals would contradict the nature of fraud, as the conspirators usually manipulate appraisals to inflate property values unlawfully. Therefore, the act of identity theft within the context of fraudulent second liens stands out as an essential and defining characteristic of this specific scheme.