MORTGAGE FRAUD – DEFINITION & PENALTIES

The federal government takes financial institution fraud (FIF), such as mortgage fraud and bank fraud, very seriously. Any action that threatens the security of the nation’s financial institutions is thoroughly investigated by the FBI. Those who have been arrested and charged with mortgage fraud or other white-collar crimes often seek representation as soon as possible to pursue a beneficial outcome.

WHAT IS MORTGAGE FRAUD?

By legal definition, mortgage fraud includes any misrepresentation, omission of information, or misstatement made on a mortgage loan application that a lender relies on to make a determination regarding servicing a loan. Common examples of mortgage fraud include an individual falsifying information their mortgage loan application in an attempt to convince the bank approve the loan, grant specific repayment terms, or accept a reduced payoff settlement. There are 2 major types of mortgage fraud:

Fraud for Profit

This type of fraud is committed by insiders, such as appraisers, bank officers, loan originators, mortgage brokers, and others in the banking and loan industry. Federal prosecutors and investigators often find that fraud for profit is used to steal money and equity from homeowners or lenders.

Fraud for Housing

Fraud for Housing generally entails borrowers lying about income or assets on a loan application in order to maintain or acquire ownership of a home. They may also try to influence an appraiser’s statement of a home’s value.

Types of mortgage fraud include:

  • Foreclosure rescue schemes
  • Inflating an appraisal’s value to get more money in a transaction
  • Illegal property flipping
  • Loan modification schemes
  • Claiming assets or income the borrower does not have
  • Equity skimming

PENALTIES FOR MORTGAGE FRAUD

Mortgage fraud is a felony offense. Thus, it carries severe penalties. These include prison sentences of up to 30 years, fines of up to $1 million, and possible probation. Furthermore, those convicted may have to pay restitution, which can be hundreds of thousands of dollars, depending on the amount stolen. A conviction of federal mortgage fraud can have serious, lifelong consequences. To uphold their rights in court, defendants will often obtain knowledgeable representation as soon as possible.

CALL BERRY LAW FIRM TODAY

Since 1965, Berry Law Firm has represented clients facing criminal charges. Our Nebraska criminal defense attorneys can provide informative services and aggressive representation in the courtroom. There are a variety of legal defenses to mortgage fraud and other crimes that can be used to maintain innocence, or to reduce penalties. Those who have been arrested for mortgage fraud may benefit from the experienced representation provided by Berry Law Firm.

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