Suing for Civil Mortgage Loan Fraud

If you are considering legal action against someone for civil mortgage loan fraud, it’s essential to understand the intricacies of this offense. Civil mortgage loan fraud occurs when a business like a bank, mortgage broker, or lender deliberately misrepresents or conceals important information during a mortgage transaction, leading to financial loss or harm.

As a potential plaintiff, you need to be aware of the various forms of mortgage fraud, such as fraudulent appraisals, inflated income claims, undisclosed liens, and false occupancy statements, among other scams that take advantage of homeowners. Pursuing legal action can protect your interests and hold wrongdoers accountable. To do it right, talk to an experienced attorney in your area.

What Are the Types of Mortgage Fraud?

To better understand the scope and gravity of civil mortgage loan fraud, let’s explore some real-world examples of this practice:

• Appraisal fraud: In this scenario, the perpetrator artificially inflates the property’s value to secure a higher loan amount than the property is actually worth. As the borrower, this puts you at risk of overpaying for the property and facing financial troubles down the line.
• Income fraud: Here, the fraudster falsifies income documents on your home loan application to qualify you for a larger mortgage, often providing false tax returns or exaggerated income statements. As a result, you may be approved for loans you cannot afford, later leading to foreclosure or financial distress.
• Straw buyer scheme: A person with good credit poses as the borrower to obtain a mortgage on behalf of someone else with poor credit. The true beneficiary, often involved in fraudulent activities, then gains access to the property and eventually defaults on the loan, leaving the straw buyer and lender to bear the consequences.
• False occupancy statements: This happens when the borrower or lender makes a false statement about the intended occupancy of the property. For example, stating that a piece of real estate will be owner-occupied will likely lead to a lower interest rate, even if the borrower intends to rent the place out.

Keep a close eye on your loan documents as you work with a mortgage lender. If you notice anything fishy, you can find a new lender. Just like homebuyers are encouraged to talk to a few real estate agents before hiring one, you should do the same think with lenders.

Proof Required To Win a Potential Lawsuit

As a potential plaintiff, securing a successful outcome in a civil mortgage loan fraud lawsuit requires substantial evidence to support your claims. You will need an attorney who is experienced in this area of the law to assess your claim, assess your proof, file the lawsuit, and then guide you through the process. To prevail in court, you must demonstrate the following:

• Misrepresentation: You need to prove that the defendant deliberately provided false information or concealed essential facts during the mortgage transaction and that you relied on that fraudulent information in agreeing to the mortgage. Gather all documents, emails, or any communication that indicates misrepresentation or fraudulent intent.

• Financial harm: You should clearly document the financial losses or damages suffered as a direct consequence of the fraudulent activity. Gather all relevant financial records, loan statements, and documents that substantiate your claim for compensation.
• Causation: You must prove that the defendant’s fraudulent actions are the reason you suffered harm. Prove that the misrepresentation directly led to your financial losses, such as foreclosure, bankruptcy, or a diminished credit score.

What You Can Recover in a Lawsuit

If you succeed in proving your case, you may be entitled to various forms of compensation for mortgage fraud, including:

• Financial restitution: This includes reimbursement for the actual financial losses you incurred due to the fraud, such as extra mortgage payments, legal fees, and any additional expenses directly related to the fraudulent transaction.
• Punitive damages: In cases of extreme misconduct, the court may award punitive damages to punish the defendant for their fraudulent actions and to deter others from engaging in similar practices.
• Contract cancellation: In some cases, the court may order the mortgage contract to be rescinded or canceled, returning you to the financial position you were in before the fraudulent transaction occurred.
• Legal fees and costs: If you win your case, you might also be entitled to recover the legal fees and costs associated with pursuing the lawsuit, which can help alleviate the financial burden of the litigation process.

Talk to an Attorney Today

Taking legal action against someone for civil mortgage loan fraud is a complex process that requires compelling evidence and diligent effort. Scheduling a consultation with an attorney who knows this area of law will make a difference in whether you can recover what you are owed.