Raiser & Kenniff is a premier white collar criminal defense law firm. We handle all forms of criminal defense ranging from SEC violations, to full on federal investigations. Mortgage insurance fraud, is an example of a potential federal fraud that we can help with. Mortgage insurance is a type of insurance which protects lenders in case of a default. Homeowners who purchase a home with less than a 20% down payment, are required to purchase mortgage insurance. Mortgage insurance purchased on a private loan, is called PMI. This form of insurance became very popular in the 2008 financial crisis, because borrowers were able to get homes with little or no down payments. Mortgage insurance can make it easier for homeowners to obtain homes, with no savings – due to the presence of mortgage insurance fraud.
In some cases, mortgage insurance fraud can be a component of a larger fraud scheme, in order to avoid repaying a mortgage loan. If you are convicted, you could face serious criminal penalties. If you’re facing legal charges, then you could face prosecution in federal court and years of imprisonment. We have experience dealing with mortgage insurance fraud cases, and can help you protect your future.
Mortgage insurance policies pay out to a lender, in the event the homeowner cannot make payments on his/her property. If a homeowner defaults, the insurer pays out to the lender to cover the losses. Any property owner who purchases mortgage insurance in order to fulfill requirements ot get a property, and then participates in mortgage fraud, can be found guilty of mortgage insurance fraud. Homeowners who make false claims about their income, or ability to repay, when applying for a loan and obtaining PMI, can be found guilty of insurance mortgage fraud.
In order to make a case against you, the prosecutor has to prove you made false statements, and intended on misleading the lender/insurer. Without this, there is no case. This form of fraud occurs when property owners participate in schemes to avoid repaying a mortgage. For example, the buyer of the property might lie about income, employment, or assets, in order to get the mortgage. In some cases, it can occur as a result of short sale fraud. PMI pays when a home is being sold for less than what’s owed in a short sale. Short sale fraud happens when a lender approves a sale of home for less than the mortgage is worth, due to misrepresentations about the value of the property.
There are many penalties possible for mortgage insurance fraud. Fraud against banks is a federal crime, which carries a penalty of up to 30 years in prison, and a fine of $1 million. You can be charged even if you didn’t intend on defrauding a financial institution. In addition, you could be charged with insurance fraud under Article 176, and even wire/mail fraud as well.
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