The Basics of Mortgage Fraud
Since the real estate industry first began showing signs of decline in 2006, national attention has turned more and more toward mortgage fraud. Mortgage fraud is a crime that involves some type of significant misstatement, misrepresentation or omission for the purposes of convincing a lending institution or underwriter to fund a loan, or to purchase or secure a loan. The misrepresentation at issue may refer either to the property itself or to the potential borrower, so long as the lender or underwriter relies on the statement in making its decision to grant or secure the loan.
In many cases, mortgage fraud is used to obtain a loan by misrepresenting either the borrower's qualifications or the value of the property offered as collateral. Mortgage fraud may include, but is not limited to, the following:
- Falsified loan applications
- Inflated appraisals
- Fraudulent supporting documentation
- Kickbacks
- Use of fictitious or stolen identities
As a result of changes to federal law in recent years, the criminal penalties for conviction of mortgage fraud have increased dramatically.
Previously, a person convicted of mortgage fraud may have received nothing more than probation. Under new laws, however, a conviction of mortgage fraud may now result in a maximum of 30 years in prison and a fine of up to $1 million. In addition, the statute of limitations on mortgage fraud has been increased from five years to ten, which gives prosecutors much more time to build a case against someone suspected of mortgage fraud.
Because the penalties for conviction may be severe, if you have been charged with mortgage fraud it is crucial that you seek the advice of an experienced criminal defense attorney as soon as possible.