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Mortgage Bank Fraud

Mortgage Bank Fraud

Mortgage and Bank Fraud Federal Criminal Defense Attorneys

If you or a loved one has been charged with mortgage fraud, you may be subjected to huge fines and a long time in prison if you are convicted. It is in your best interest to hire federal mortgage fraud defense attorneys with a good reputation to represent you and get you a fair ruling. Here is a breakdown on what you need to know about a mortgage fraud case.   Return to our main federal appellate law firm page.

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What is Mortgage Fraud?

Mortgage fraud implies deliberately providing false or misleading information regarding mortgage documents with the intention of finalizing a real estate deal that should not be closed. Federal mortgage fraud can be committed by a real estate professional, seller, or buyer. When a real estate agent or seller commits the crime, it is known as “fraud for profit” since their intention is to earn from the unlawful transaction. When a buyer commits the crime, it is known as “fraud for housing” since their intention is to own property that they otherwise do not qualify to own. Some typical examples of mortgage fraud include:

  • Understating debt
  • Inflating the value of a real estate property
  • Overstating income when applying for a loan
  • Misleading a person through bait and switch tactics to accept a bad loan
  • Tweaking information presented by a borrower

Single and Multiple Actions

Mortgage fraud involving a single action is where a borrower knowingly misrepresents the amount of money they earn or accept an undisclosed payment or kickback from the seller. In a single action, the borrower is working alone. Multiple actions occur when several people collude to acquire a mortgage. For example, mortgage fraud flipping. This is where a buyer acquires property at a low price and then works with an appraiser who is willing to value the property at a higher price. The buyer now sells their newly acquired property at an inflated price and shares the profits with the appraiser.

Mortgage Fraud Schemes

Here are some of the common mortgage fraud schemes as featured in excerpts from the “Basic Training on Defending a Mortgage Fraud Case” by Holly A. Pierson.

Property Flipping

Flipping arises when properties are bought and their monetary value inflated before they are resold. This procedure is repeated a few times by the co-conspirators before the lenders foreclose these properties.

Equity skimming is where an investor uses a nominee (straw buyer) to get a mortgage loan in their name. After closing, the nominee signs over the property to the investor. The investor then rents out the property and keeps the rental payments and does not bother paying the mortgage. Eventually, the lender forecloses the property for non-payment.

False Documentation and Appraisal Fraud

False documentation arises when false statements are made on one’s loan application. Appraisal fraud includes inflating values or falsifying the real condition of a piece of property and also failing to include negative features that may affect the real value of the property.

Identity Theft

Identity fraud is part of federal mortgage fraud cases especially in cases of equity skimming. For example, the nominee or straw buyer steals the identity of another person and then uses their information to secure a mortgage. Mortgage Fraud is About Intent Like in other cases of criminal fraud, mortgage fraud cases also lay the burden of proof on the prosecution. The prosecution needs to show that the defendant intended to defraud. Mortgage fraud only occurs when the act is committed on purpose. Where a borrower mistakenly misrepresents information, the act does not qualify as mortgage fraud.
Mortgage Bank Fraud Appeal Lawyers

Penalties for Mortgage Fraud

If you or a loved one is accused of mortgage fraud, you better hire bank and federal mortgage fraud appeals lawyers to get you a favorable judgment. Mortgage fraud can subject you to several significant penalties. Mortgage fraud is mostly considered a felony but in cases involving a small amount of money, it may be charged as a misdemeanor. The penalties for mortgage fraud may include:

Jail Time: If you get a conviction for federal mortgage fraud, you may be facing 30 years in prison. A state conviction will carry a lesser jail sentence. If the conviction is classified as misdemeanor fraud, you may be jailed for up to one year.

Fines: Mortgage fraud involves high fines. If you are convicted for a single count of federal mortgage fraud, you may have to pay up to $1 million. State mortgage fraud cases carry fines amounting to a few thousand dollars for misdemeanors and over $100,000 for felony convictions.

Restitution: In some mortgage fraud cases, the defendant may be asked to pay restitution. This payment is meant to recompense the complainant for your actions. Restitution is different from a fine because fines are imposed as penalties. For example, if you are charged with mortgage fraud for making false statements during your mortgage application, you may be asked to pay fines to the government and restitution to the lender.

Probation: You may be sentenced to probation in addition to prison sentences and fines. A probation sentence may last one year. If you are on probation, you are required to meet certain requirements such as going for random drug testing, reporting to a probation officer, and refraining from criminal activities.

Mortgage Fraud Appeal

Many mortgage fraud trials take a long time before a ruling is delivered. If you chance to get an unsatisfactory ruling, you have the option of filing an appeal. To qualify for an appeal, you need to have strong grounds for contesting pretrial and trial rulings. Appeals also involve motions filed. For example, you may file motions to dismiss a case for lack of jurisdiction or motion that suppresses evidence. You may also seek to review errors by the trial court. Appeals are complex and very tricky. Make sure you consult seasoned and reputable bank and federal mortgage fraud appeals lawyers to take on your case.

Bank and mortgage fraud are one of the most popular white-collar crimes. If you find yourself entangled in a mortgage fraud case, you had better get yourself a good lawyer. Mortgage fraud can result in huge fines of a few thousand dollars to even a million, depending on the amount of money involved. You may also be facing a long-term jail sentence. If you get an unfair ruling in your mortgage fraud case, consult experienced bank and mortgage fraud appeals lawyers to avoid incurring losses and spending time behind bars.