Mortgage Fraud Defense Attorneys

Mortgage fraud is a serious Class C felony punishable under federal law. It occurs in many forms, with lenders, homeowners, and prospective homebuyers all being susceptible to and having the ability to create mortgage fraud schemes.

If someone has accused you of federal mortgage fraud, it’s crucial to get in contact with a mortgage fraud defense attorney right away.

What is Mortgage Fraud?

Mortgage fraud is the intentional misrepresentation or misinformation regarding the financing of a mortgage or the property itself. There are many ways mortgage fraud can occur, and both lenders and property buyers can create mortgage fraud schemes.

People can carry out mortgage fraud in external and internal manners. In the case of external fraud, the fraudster doesn’t have a relationship with the victim. In contrast, internal fraud means that mortgage brokers or other institutions use their resources to perform the scheme.

According to the FBI, there are two main categories of mortgage fraud. They include:

  • Fraud for profit
  • Fraud for housing

Fraud for profit schemes involves the mortgage lending process. For example, mortgage brokers, attorneys, or appraisers might intentionally use their knowledge of the housing industry or authority to mislead homeowners and lenders. 

The FBI views mortgage lender frauds like these for-profit schemes as severe offenses and prioritizes them during their mortgage fraud investigations.

On the other hand, fraud for housing schemes is when an aspiring mortgage borrower misleads lenders or incentivizes appraisers to change a property’s value. The ways that fraud for housing occurs include falsifying income on loan applications and enhancing a person’s asset information.

It’s challenging for governments to determine how much money people lose to mortgage frauds each year. However, in 2010, the U.S. Department of Justice estimated that fraudulent loans totaled around $10 billion

In response to the devastating financial impact that mortgage fraud has on victims, the Bureau of Justice Assistance awards compensations to eligible individuals.

Types of Mortgage Fraud

Within the general fraud for profit and fraud for housing sectors, there are dozens of schemes. Some examples that mortgage fraud attorneys frequently see include:

  • Illegal property flipping
  • Builder bailouts
  • Equity skimming
  • Air loans

Mortgage fraud also comes in the form of foreclosure rescue schemes. In these cases, the person performing the scam seeks out homeowners who are on the brink of defaulting on their mortgage. They convince the person that they can transfer the deed to an investor’s name, and they make money by creating a fraudulent appraisal and selling the property to that investor.

Older homeowners may also become victims of home equity conversion mortgage (HECM) fraud. In this case, scammers apply for a HECM in the homeowner’s name and convert the property’s equity into cash. Often, the homeowner never finds out about the scam. So, the fraud usually doesn’t become apparent to a mortgage lender until the homeowner passes away.

Commercial real estate loans are yet another form of mortgage fraud. It occurs when someone changes a property’s appraised value to obtain financing. They may create false leases to make the property appear more valuable. Ultimately, the borrower neglects the property and defaults on their loan, leaving lenders with a low-value commercial property.

Why Is Mortgage Fraud a White Collar Crime?

Mortgage fraud is a white-collar crime because it’s a financially motivated scheme that doesn’t cause anyone physical harm. White-collar crime requires the falsification of financial information that often uses the cover of a legitimately operating system for personal gain. 

A mortgage fraud penalty varies depending on the scope of the scheme. But given that mortgage fraud is a Class C felony, federal law states that those convicted can face up to twenty years in prison and fines up to $5 million.

Because of the serious repercussions, if someone accuses you of mortgage fraud, you should immediately seek professional support.

How a Mortgage Fraud Lawyer Can Help

Given the severity of mortgage fraud penalties, it’s crucial to contact a mortgage fraud defense lawyer with experience in this sector. At Zoukis Consulting Group, a mortgage fraud attorney will work with you to understand your side of the story and analyze the prosecution’s claims.

There are several ways a lawyer from Zoukis Consulting Group may be able to prove to the jury that you’re not guilty, including:

  • Good faith belief
  • No knowledge
  • Substantial assistance
  • Unlawful search and seizure

A skilled mortgage fraud attorney will help you understand which of these common defenses, or other available legal defenses, make sense considering the facts and circumstances of the criminal charges.

If the alleged mortgage fraud occurred as the result of an honest mistake, and you believed that you were acting appropriately and legally, your attorney can use this in your defense. In some cases, these types of mistakes are the result of being intentionally misled by a mortgage company or another party. In these scenarios, your attorney may hire forensic accountants, property valuation experts or other expert witnesses who can help document that the third party was at fault and that you are not guilty of the charges.

The loan application itself is also frequently used as evidence in mortgage fraud cases where the accused is charged with making false statements. The application can be a powerful piece of evidence to demonstrate that the mortgage advisor, and not the applicant, committed the alleged fraud.

This may be obvious in cases where much or most of the information required on the application is simply not there. If the identifying information, financial data and other statements that you provided on the application were accurate, complete and true, but information you didn’t complete is the basis for the fraud, your defense attorney may be able to advocate for your rights on the basis that you were an unknowing participant in the fraud.

It is important to remember that the burden of proving that mortgage fraud occurred lies with the prosecution, and they must prove the charges beyond a reasonable doubt. When defense counsel can demonstrate that the defendant lacked the intent to commit the mortgage fraud offense(s) with which the defendant was charged, the prosecution may not have a case to pursue.

In the case that you plead or are found guilty, you may pay lower fines or spend less time in jail as a result of your lawyer’s work. Zoukis Consulting Group offers a one-hour consultation so that you can determine if we’re a good fit for your case.

Schedule an appointment with us today to learn more about we can help you with your mortgage fraud charges.