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Federal Mortgage Fraud Charges
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Federal Mortgage Fraud: Real Estate Fraud Scheme Defense
The 2008 financial crisis taught everyone what mortgage fraud means—and federal prosecutors haven’t forgotten. Mortgage fraud remains a major enforcement priority, with cases carrying up to 30 years in federal prison when charged as bank fraud. Whether your accused of lying on a loan application, participating in a straw buyer scheme, or inflating appraisals, the consequences are devastating.
If your under investigation for mortgage fraud—or already facing charges—you need to understand how these cases work and what defenses are available.
What Is Mortgage Fraud?
Mortgage fraud involves misrepresentations or omissions in connection with mortgage loans. Common schemes include:
Income fraud – Overstating income on loan applications
Asset fraud – Misrepresenting assets or down payment sources
Appraisal fraud – Inflating property values
Straw buyer schemes – Using fake buyers to obtain loans
Property flipping – Artificially inflating prices through rapid sales
Equity stripping – Targeting homeowners with predatory refinancing
Occupancy fraud – Claiming primary residence for investment properties
Federal Charges
Mortgage fraud typically gets charged under multiple statutes:
Bank fraud (18 USC 1344) – Up to 30 years (when federally insured bank is victim)
Wire fraud (18 USC 1343) – Up to 20 years
Mail fraud (18 USC 1341) – Up to 20 years
False statements to financial institutions (18 USC 1014) – Up to 30 years
Conspiracy (18 USC 371) – Up to 5 years
Who Gets Prosecuted?
Mortgage fraud prosecutions target everyone in the chain:
Borrowers who lied on applications. Loan officers who facilitated false applications. Appraisers who inflated values. Real estate agents involved in schemes. Settlement agents and title companies. Investors who organized schemes.
Defense Strategies
No Intent to Defraud
Mortgage applications are confusing. People make mistakes. If you didnt intend to deceive the lender—if you misunderstood what was being asked—thats a defense.
Reliance on Professionals
Did your mortgage broker fill out the application? Did you rely on a loan officer’s guidance? Reliance on professionals can negate intent.
Bank Wasn’t Deceived
Sometimes banks know about inflated values or questionable applications and approve loans anyway. If the bank knew the truth, there’s no fraud.
Materiality
The misrepresentation must be material—it had to influence the lending decision. Minor errors that wouldnt have changed the outcome may not constitute fraud.
Act Now
Mortgage fraud investigations involve extensive document review. The earlier you have defense counsel analyzing the same documents prosecutors are seeing, the better. Contact a federal criminal defense attorney today.