Understanding and Defending Against Mortgage Fraud Charges

What is Mortgage Fraud?

Mortgage fraud is a broad term that collectively includes various types of misstatements or misrepresentations on mortgage documents. Everyone from a home buyer 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 work for a not-guilty ruling if the matter reaches trial.

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 by providing false documents for a mortgage application. An appraiser may engage in mortgage fraud by unjustly manipulating the appraised home value to benefit the buyer.

Generally, two parties are involved – the defendant providing false information, and another party accepting fraudulent data to execute a mortgage transaction. Mortgage fraud cases may also involve fraudulent appraisals when flipping property, undisclosed second mortgages, applicants using stolen identities, using straw buyers and more.

Penalties for Mortgage Fraud Conviction

After the 2007-2008 mortgage lending crisis, Congress passed the Fraud Enforcement and Recovery Act (FERA) in 2009, expanding federal law enforcement power over mortgage fraud. Penalties were also strengthened – depending on charges, a convicted party may face up to $1 million in fines and 30 years in prison.

About a third of states also have mortgage fraud laws, with generally less severe penalties than federal charges. A defense attorney may work to reduce federal charges to state-level charges in these states.

Convictions may also bring civil charges and restitution orders to pay back damages to affected parties, adding financial burden.

Mortgage Fraud Defense Strategies

Mortgage fraud generally involves falsifying documents like loan applications, title reports, mortgage deeds, tax forms, income/deposit verifications. While fraud implies intent, some cases result from mistakes or misunderstandings. A common defense is arguing lack of intent, though this requires great skill to prove.

Other potential defense strategies:

• Arguing Fourth Amendment rights were violated if documents were improperly collected without a valid warrant.
• Proving the defendant’s identity was stolen and used fraudulently to apply for the mortgage.

Contact a Mortgage Fraud Defense Lawyer

Regardless of the mortgage fraud charges you face, a conviction could bring severe federal, state and civil consequences. To request a consultation with an experienced mortgage fraud attorney, contact our law office today. Early legal representation is crucial.