Mortgage fraud is a broad term that collectively includes various types of misstatements or misrepresentations on mortgage documents. Everyone from a home buyer who is applying for a new mortgage to a mortgage broker or even a real estate agent can commit mortgage fraud in various ways. If you are facing a mortgage fraud criminal charge or if you are the subject of a fraud investigation, it is important to engage the services of a skilled defense attorney. Your attorney may work toward reduced or dismissed charges, or the attorney may work for a not-guilty ruling if the matter reaches the trial stage.
Understanding Mortgage Fraud
Federal statutes do not specifically name mortgage fraud as a crime. Instead, this term is used to describe crimes like conspiracy, bank fraud and wire fraud as they relate to mortgage documents. As an example, a home buyer may commit mortgage fraud if he or she provides false documents for a mortgage application. An appraiser may engage in mortgage fraud if he or she unjustly manipulates the appraised value in a home for the benefit of the buyer.
Generally, two parties are involved in a mortgage fraud charge. The defendant is the party that provides false information. The other party, who may or may not be involved in the fraud, accepts fraudulent data for the purpose of executing a mortgage transaction. In addition to the types of mortgage fraud described, these cases may involve a fraudulent appraisal when flipping a property, the use of a second mortgage without the primary lender’s knowledge, an applicant using a stolen identity to take out a mortgage, the use of a straw buyer and more.
Penalties for a Mortgage Fraud Conviction
After the collapse of the mortgage lending market in 2007 and 2008, Congress passed the Fraud Enforcement and Recovery Act, or FERA, in 2009. While mortgage fraud cases were made and prosecuted prior to this time, FERA broadly expanding the capabilities and power of federal law enforcement agencies as they relate to mortgage fraud. More than that, penalties for some types of mortgage fraud under FERA have been strengthened. In fact, depending on the charges, a convicted party may face up to $1 million in fines and up to 30 years in prison.
In addition to the wide range of federal charges that fall under the mortgage fraud umbrella, approximately a third of the states have their own laws covering various types of mortgage fraud. Penalties for state-level charges are generally less significant than those for federal fraud charges. In these states, a mortgage fraud defense attorney may work to have the federal charges reduced to state-level charges.
Keep in mind that a conviction of state-level or federal-level charges may be combined with civil charges and restitution. These outcomes place an additional financial burden on the defendant. For example, through restitution, the court may rule that the defendant has to pay back all of the damages to the affected party.
Mortgage Fraud Defense Strategies
Mortgage fraud generally involves the falsification of documents like loan applications, title history reports, title opinions, mortgage deeds, tax forms, verification of income and verification of deposit. Fraud may be for financial gain or for the purpose of securing a home. While a criminal fraud charge implies intent, some instances are the result of a mistake or a misunderstanding. Because of this, a common defense strategy used by a skilled lawyer is to argue a lack of intent. However, this can be a challenging defense to use because proving a mistake versus an intentional act in court requires incredible skill.
There are other defense strategies that a fraud lawyer could use. For example, the attorney could state that your Fourth Amendment rights were violated. This may be if documents used by the prosecutor were collected improperly without a valid warrant. Unfortunately, the primary documentation used in a fraud case often has been conveyed between the two parties consensually. Nonetheless, this strategy may be used in certain instances.
In some cases, the defendant is the victim of identity theft. His or her identity was stolen and used to apply for a mortgage. If this is the case, the attorney can prove that identity theft has occurred as a defense.
Contact a Defense Lawyer Today
Regardless of the nature of the mortgage fraud charges that you face today, a conviction could result in severe consequences. These span from the federal and state level to civil charges and restitution. To request a consultation with an experienced mortgage fraud attorney, contact the law office by phone or email today.
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