Mortgage fraud covers a broad range of offenses, almost all centering around a material misrepresentation, misstatement or omission of fact in relation to a mortgage loan relied upon by a lender.
There are many ways in which offenders commit mortgage fraud, from lying directly to the bank about your income to secure a mortgage on a property to illegal house flipping or false appraisal schemes.
Mortgage fraud is considered a subtype of financial institution fraud (FIF).
The penalty for mortgage fraud depends upon the jurisdiction the offender is being charged within, be it state or federal court. Criminal mortgage loan fraud can be investigated at the state level, but charges will ultimately be levied in a federal court of law within the state the crime was committed.
Penalties in a guilty verdict in a criminal mortgage loan fraud case can result in a financial restitution judgment and up to 30 years in prison.
Federal charges of mortgage fraud can lead to up to 30 years imprisonment in addition to a fine of up to $1 million. While specific charges of mortgage fraud are not part of the U.S. Code, the USC does provide a number of alternatives which usually serve just as well such as mail fraud, wire fraud and bank fraud.
State charges are typically severe, though perhaps not as severe as federal penalties.
In some states mortgage fraud is charged under the authority of state statutes. If you are accused of a mortgage fraud involving less than $100,000 in material, you might face third-degree felony charges. If convicted of a third-degree felony, you could see up to five years behind bars.
If, however, you are accused of mortgage fraud concerning more than $100,000 in material, the charge to be enhanced to a second-degree felony. Those convicted of this crime face up to 15 years imprisonment.
There are two primary categories of mortgage fraud, fraud for profit and fraud for housing. Both types of fraud contain several subcategories or examples, but the former is typically engaged in at an industry or professional level and the latter is typically conducted by individuals.
Illegal property flipping occurs when property is purchased at a low cost, a bogus or inappropriate appraisal is then offered to the same home with minimal or nonexistent renovations and the property is then put up for sale. This scheme can also involve contractor kickbacks that escalates the financial incentive to misrepresent the dealings surrounding the property.
Occupancy fraud occurs when a buyer, legitimate or standing in as a strawman for an unqualified buyer, claims that the property they wish to take out a mortgage for will be their primary residence with no actual intention of doing so. Once the deal is done, the buyer does not settle in the property as promised, but rather it remains vacant, or is resided in by an accomplice of the fraudulent buyer or borrower.
Air loans (a loan involving a nonexistent property or buyer), identity theft (an unwitting victim has their credentials stolen and used to act as a buyer or borrower by the offender), and simple income or asset falsification are also variations of mortgage fraud schemes.
The Federal Bureau of Investigation (FBI) does the lion’s share of the investigative work involving serious mortgage fraud at the federal level. Considered a white-collar crime, investigators prioritize cases with the most consumer impact as well as the highest potential losses. The FBI maintains a most-wanted list of alleged fraudsters at all times, with information distributed publicly.
State officials and law enforcement agencies also investigate mortgage fraud within their borders.
Collecting all relevant records and immediately contacting an experienced criminal defense attorney who one specializes in white-collar crime or financial crime is highly advisable if you are facing charges related to mortgage fraud.
The importance of retaining skilled legal counsel familiar with the nuances and precedents involved in mortgage fraud cases is important to secure a solid defense. White-collar criminal cases are even more complex than those involving more mundane details, and so it is important to place your case in the hands of those used to dealing in such matters.
Legal counsel can help you present as much information as possible to strengthen your case. Your attorney can help with possible strategies, avenues for appeal or for a plea bargain and advice.
Skilled attorneys will aid in the process to:
Mortgage loan fraud, also known as simply mortgage fraud, is a very serious crime. The F.B.I. dedicates an entire section of their website to “white collar crime,” identifying criminal mortgage loan fraud near the top of their “Major Threats” category.
If you are under investigation for mortgage loan fraud, or have been accused of criminal mortgage fraud, it is crucial to seek the counsel and applied wisdom of an experienced criminal mortgage loan fraud attorney.
These attorneys offer legal representation in the court of law, ensuring your rights are not violated and justice is served. Criminal mortgage loan fraud attorneys will also help you develop a solid understanding of your case by informing you of state and federal laws, presenting the facts in a digestible manner and guiding you to the best course of action moving forward.