Strategic Federal And State Criminal Defense

What is mortgage fraud?

On Behalf of | Dec 17, 2015 | White Collar Crimes |

Owning a home is part of the American dream. However, as with any transaction, there is the possibility that allegations of cheating and stealing will be made. With regard to purchasing a home, this is often referred to as mortgage fraud. This crime can take many forms, but regardless of the form, it is treated very seriously by prosecutors, especially after the housing calamity that occurred during the Great Recession.

So, what qualifies as mortgage fraud? First, it is important to realize that mortgage fraud can be committed by an individual looking to buy a home, or by individuals on the other side of the transaction, including real estate agents, assessors and sellers. When it comes to buyers, those who falsify supporting loan documentation, such as pay stubs, may be found to have committed fraud. This is true, too, if a buyer uses another, undisclosed mortgage to cover the down payment for the new mortgage, if a buyer conceals their identity by using a straw purchaser, or if a buyer uses a stolen identity to secure a mortgage.

On the other side of the coin, professionals and sellers may be guilty of fraud if they falsely inflate a property’s value to sell it for a larger profit. They may also be accused of fraud if they commit equity skimming, which involves using a straw buyer who relinquishes the property to an investor, who then, without paying the mortgage, rents the property until it is foreclosed upon.

Those accused of mortgage fraud can face serious legal challenges. A conviction at the federal level could lead to up to 30 years in prison and $1 million in fines. There may even be additional state charges levied against these individuals. Therefore, those who are accused of mortgage fraud, or a similar federal crime like wire or bank fraud, should think about discussing the matter with a skilled legal professional.

Source: FindLaw, “Mortgage Fraud,” accessed on Dec. 11, 2015