Strategic Federal And State Criminal Defense

What actions lead to suspicion of mortgage fraud?

On Behalf of | Mar 2, 2023 | Federal Crimes |

Most types of financial crimes are serious federal offenses, and the penalties associated with a conviction for these crimes are significant. For example, mortgage fraud is a white-collar criminal offense, and while this type of activity lacks an element of violence, it can still result in decades behind bars. Those accused of mortgage fraud in California will benefit from an understanding of what they are up against, as well as an understanding of how they can defend themselves from these accusations and their potential implications. 

When buying a home, it is likely that you applied for a mortgage. Most homebuyers cannot pay for a house outright, and it is common to finance the purchase. However, fraud can take place during the mortgage application process when an applicant is untruthful with the information he or she must provide. Misinformation or the omission of important information can affect the outcome of a mortgage application, and doing so knowingly is a crime. 

Committing fraud during a mortgage application 

Simply put, mortgage fraud is the act of leaving out critical information or lying on an application to seek mortgage funding. An underwriter or lender uses the information provided on a mortgage application to determine whether to approve an application, provide funding or insure a loan. The intent of mortgage fraud is either fraud for profit or fraud to secure property. Specific types of mortgage fraud include: 

  • Asset rental — This type of fraud happens when an applicant rents or borrows the assets of others in order to look more qualified on a loan application. 
  • Equity skimming — This happens when someone uses straw buyers to purchase property. After the purchase is complete, the investor takes over the property with a quit claim deed. 
  • Inflated appraisals — False appraisals intentionally underestimate or inflate the value of a home in order to secure more funds, increase commission on the sale or other type of gain. 

Committing any type of mortgage fraud is a federal crime. If you are under investigation for this type of offense or you are already facing these charges, it is in your interests to seek counsel regarding the specific legal options available to you. With a thoughtfully prepared defense strategy, you may be able to effectively confront the charges you are facing, possibly avoiding a conviction. There is much at stake for you, but you do not have to navigate the criminal justice system on your own.