Mortgage fraud is a serious federal offense, one that often has ties to organized crime. Since the housing crash in 2008, mortgage loans and real estate transactions have been under increased scrutiny by state and federal authorities and investigative agencies.
Any allegations of fraud involving mortgages, home loans or real estate transactions are carefully investigated by the federal government and offenders are aggressively prosecuted. As a result, any person in California charged with mortgage fraud could face harsh criminal penalties of up to 30 years in federal prison or fines not exceeding $1 million, or both, upon conviction.
If you suspect that you may be under investigation for mortgage fraud, or if you have been arrested by federal agents on suspicion of mortgage fraud, you will want to consult a qualified defense attorney to discuss how to avoid a criminal conviction. At Federal Criminal Defense Lawyers, we have a team of California defense attorneys with extensive experience defending clients against federal charges like mortgage fraud.
When you hire our attorneys, we will dedicate our time and extensive resources to your case. Call our firm today to discuss your case and find out how we can protect your legal rights.
What is Mortgage Fraud?
Mortgage fraud is a type of criminal offense that involves intentionally misstating, misrepresenting or omitting information on a mortgage loan application in order to complete a mortgage transaction. Mortgage fraud crimes can be committed by homebuyers, appraisers, mortgage brokers, real estate attorneys or other real estate professionals for the purpose of securing housing or misusing the mortgage lending process to steal cash and equity from lenders or houseowners. In pursuing charges for mortgage fraud, the federal government recognizes two distinct types of criminal conduct:
• Fraud for Profit – Perpetrators of this offense often include industry insiders and professionals engaged in the industry, such as bank officers, appraisers, underwriters, attorneys and mortgage brokers who have an in-depth understanding of mortgages and use their authority or specialized knowledge to commit or facilitate the fraud.
• Fraud for Housing – Fraud for housing is the other main type of mortgage fraud. It usually involves borrowers obtaining a mortgage loan or real estate ownership using lies and deception, i.e. misrepresenting income and assets on a loan application or persuading an appraiser to manipulate the appraised value of a property.
Mortgage Fraud Charges
Mortgage fraud is a broad legal term covering a wide range of unlawful conduct involving any situation where one party uses inaccurate or false information on mortgage documents to defraud another. Because mortgage fraud is not a standalone federal charge, any person accused of this crime may be charged under the federal statutes that prohibit wire fraud, mail fraud, bank fraud, conspiracy or other fraud-related crimes, depending on the circumstances of the case.
The criminal conduct known collectively as mortgage fraud consists of any number of illegal schemes, each of which involves some type of intentional misstatement or misrepresentation on mortgage documents. The following are some of the most common types of mortgage fraud:
Silent second – A situation where a homebuyer takes out a second mortgage to cover the down payment on the first mortgage loan without informing the initial lender.
Inflated appraisal – An appraiser provides an over-inflated appraisal value that matches the amount the buyer is offering in order to complete the deal. Usually, this is done in collusion with the loan officer and/or mortgage broker.
Stolen identity – A mortgage loan applicant uses someone else’s identity on a mortgage loan application without the person’s knowledge.
Straw buyer – A mortgage loan is obtained using the name and credit history of a straw buyer or nominee with the intention of concealing the borrower’s identity.
Equity skimming – An investor uses a nominee as well as false income information and credit reports to obtain a mortgage loan in the name of the straw buyer (nominee). After the property is signed over to the investor, the straw buyer rents the property until it is foreclosed, without making payments on the mortgage loan.
Fraudulent supporting loan documentation – A mortgage loan applicant submits altered or forged paycheck stubs or other fraudulent supporting documentation.
Property flipping – A property is purchased, fraudulently appraised at an over-inflated value, and then quickly resold.
Potential Penalties for Mortgage Fraud Charges
Mortgage fraud is prohibited under both California state law and federal law. Because mortgage fraud can involve a wide range of illegal acts, the potential penalties for mortgage fraud will vary depending on the specific facts of the case. The following are some of the statutes that the federal government can use to prosecute mortgage fraud, as well as their associated penalties:
• Conspiracy (18 U.S.C. § 371) – up to five years in prison, plus a potential fine
• Making false statements on a loan or credit application (18 U.S. Code § 1014) – up to 30 years in prison or up to $1 million in fines, or both
• Wire fraud (18 U.S.C. § 1343) – up to 30 years in prison or up to $1 million in fines, or both (if the fraud affects a financial institution); otherwise, up to 20 years in prison
• Mail fraud (18 U.S.C. § 1341) – up to 30 years in prison or up to $1 million in fines, or both (if the fraud affects a financial institution); otherwise, up to 20 years in prison
• Bank fraud (18 U.S.C. § 1344) – up to 30 years in prison or up to $1 million in fines, or both
On top of a lengthy prison sentence and fines, the courts may also require the defendant to pay restitution payments, especially in cases where the lender has sustained monetary damages as a result of the fraud. In other instances, allegations of mortgage fraud may lead to additional charges such as bankruptcy fraud, tax fraud, or other types of criminal or fraudulent conduct, which can in turn increase the associated criminal penalties.
Possible Defenses for Mortgage Fraud Charges
As stated above, federal mortgage fraud charges can be brought against anyone involved in a mortgage fraud scheme, including borrowers, bank officers, appraisers, mortgage brokers and other real estate professionals. Whether you are being charged as a homebuyer or an industry professional, the burden of proof in a mortgage fraud case lies with the prosecution.
In order to get a conviction on charges of mortgage fraud, the prosecution must prove beyond a reasonable doubt that you deliberately engaged or attempted to engage in mortgage fraud. To mount a successful defense, your defense attorney will need to convince the judge or jury that:
• You have been falsely accused of mortgage fraud,
• The prosecutors have insufficient evidence to warrant a conviction,
• You provided true, correct and accurate information on your mortgage loan application, and/or
• You were acting in good faith and did not intend to break the law.
Why You Need to Hire a Criminal Defense Attorney
Given the complex nature of mortgage fraud crimes and the severe repercussions associated with a fraud conviction, it is critical that you hire a knowledgeable criminal defense lawyer who can offer you skilled representation in your mortgage fraud case.
In order to successfully defend you against any charges regarding mortgage fraud, the defense attorney you choose should have a clear understanding of federal law and extensive experience representing clients in federal court. The attorney should also have a proven history of success handling criminal cases related to mortgage fraud and other fraud offenses.
Whatever the circumstances of your mortgage fraud case, you don’t have to fight the charges alone. A good federal lawyer can help minimize or even eliminate your exposure to the severe penalties related to mortgage fraud, which is why we always recommend consulting a defense attorney as quickly as possible after you are arrested or learn that you are the target of a fraud investigation.
Our criminal defense attorneys at Federal Criminal Defense Lawyers are ready to help you at any stage of your mortgage fraud case, whether you have been arrested or charged or you have received a target letter from the federal government. Our lawyers are committed to protecting the rights and best interests of our clients and we will stand by your side every step of the way, ensuring that you get the knowledgeable, assertive legal representation you deserve.
Contact Our Mortgage Fraud Lawyers at Federal Criminal Defense Lawyers Today
Mortgage fraud is a serious federal crime and the consequences of a conviction can be devastating for you and your loved ones. If you are in need of a capable criminal defense attorney to represent you in your federal mortgage fraud case, look no further than the defense team at Federal Criminal Defense Lawyers.
When you choose our firm to handle your case, you can rest assured that we will deal with the authorities on your behalf, thoroughly review the facts surrounding your case, carry out an exhaustive investigation pertaining to your specific charge and expertly represent you in a federal court. We care about our clients’ well-being and we will defend your case with unmatched perseverance, dedication and skill. Call us today to schedule a free initial consultation.