The phrase “white-collar crime” refers to many types of fraud committed by business professionals. Typically, white-collar crimes are nonviolent but they are often financially devastating. Mortgage fraud is a type of white-collar crime that falls under the broad category of financial institution fraud. Typically mortgage fraud happens when someone makes a material misrepresentation, misstatement, or misrepresentation in a mortgage loan application.
If you have been charged with mortgage fraud, it is important to seek skilled legal representation. Attorney Steven Jumes has experience prosecuting and defending federal white-collar crime cases. He understands provides his clients with sophisticated, assertive representation. Contact our law firm today to discuss how we can provide you with assertive, experienced criminal defense.
Mortgage Fraud is Becoming More Common
According to CNBC, one out of every 109 mortgage applications may contain some form of mortgage fraud. In 2018, the risk of mortgage fraud jumped to over 12% of all mortgage applications. Mortgage fraud applicants most often lie about the following six factors on their mortgage applications:
- The applicant’s identity
- Undisclosed real estate debt
- Whether or not the home is occupied
- Income falsification
- Undisclosed credit repair
- Undisclosed real estate liabilities
- Previous or current real estate transactions
The internet makes it easier than ever for applicants to commit mortgage fraud. Online services can generate pay stubs that are completely fake. Additionally, people can pay companies to answer phone calls from lenders and confirm a fake income amount verbally. Websites even exist that allow people to buy credit lines in order to fraudulently increase their credit scores.
The Two Main Types of Mortgage Fraud
According to the FBI, there are two key areas of mortgage fraud. The first type of mortgage fraud is called fraud for profit. Typically, the criminals who commit fraud for profit are industry insiders. These insiders use their authority or specialized knowledge to facilitate mortgage fraud or directly commit mortgage fraud. Defendants who commit fraud for profit intent to misuse the mortgage process in order to steal equity and cash from homeowners and lenders. The following types of individuals are most commonly charged with the crime of mortgage fraud for profit:
- Bank officers
- Mortgage brokers
- Loan originators
- Professionals engaged in the housing industry
Fraud for profit crimes includes many different types of fraudulent schemes, such as the following:
- Loan modification schemes
- Foreclosure rescue schemes
- Illegal property flipping
- Equity skimming
- Air loans in which no property exists
- Condo conversion or builder bailout
- Equity skimming schemes
- Fraudulent reverse mortgages or home equity conversion mortgages
- Fraudulent commercial real estate loans
The second type of mortgage fraud involves home loan applicants. Mortgage fraud for housing occurs when a borrower takes illegal actions when trying to secure a home loan. Borrowers who misrepresent information about their income and assets on their home loans are guilty of mortgage fraud for housing. Mortgage fraud for housing also includes applicants who manipulate the appraised value of a property in order to buy the property.
The Internet Makes it Easier Than Ever to Commit Mortgage Fraud
There are many reasons why home loan applicants engage in mortgage fraud. The higher home prices rise, the higher the demand for larger mortgages. Homebuyers are often more likely to commit mortgage fraud when they think they are priced out of their local home buying market. Many homebuyers think that they will never be able to purchase a home without committing mortgage fraud on their loan applications. Fraudulently doctoring and altering payroll stubs and employment information has become a marketable online business.
Why do Home Loan Applicants Commit Mortgage Fraud?
Since the large housing crash that happened in 2008, lenders have imposed strict limits on the amount of debt an applicant can borrow. Lenders will not let applicants take out housing loans that are disproportionately high compared to their incomes. Some borrowers provide income amounts that are above their true income in an effort to qualify for higher dollar loans.
The more difficult it is for applicants to qualify for loans, the more likely applicants are to lie or misrepresent themselves on their loan applications. Many applicants are not aware that misrepresenting their incomes can constitute the federal crime of committing mortgage fraud.
Legal Defenses to Mortgage Fraud Charges
The federal government has been prosecuting mortgage fraud in an increasingly aggressive way since the 2008 housing crash. The federal Fraud Enforcement and Recovery Act (FERA) gives law enforcement agencies broad authority to enforce criminal laws that prohibit mortgage fraud.
Defendants charged with mortgage fraud face significant penalties. State authorities and federal agencies have the ability to prosecute mortgage fraud cases. Depending on the type of mortgage fraud, a defendant might face lengthy prison sentences and significant fines. In severe cases, defendants face fines up to $1 million and prison sentences of up to 30 years. Creating a comprehensive defense strategy is essential in fighting mortgage fraud charges.
Prosecutors must prove each element of the mortgage fraud crime in order to secure a conviction. For example, prosecutors must typically prove that the fraudulent misrepresentation was material to the mortgage fraud application. At the Law Offices of Steven Jumes, we know how to gather evidence that disproves the elements of the crime or mortgage fraud. We poke holes in the prosecutor’s case in order to give our clients the best chance possible of dismissal of the charges or receiving a not guilty verdict.
Our Texas Mortgage Fraud Defense Lawyers can Help
Mortgage fraud cases are often incredibly complex. Many mortgage fraud cases involve scrutinizing large amounts of legal documents. Complicated mortgage fraud cases require a skilled and experienced lawyer who knows how to create effective defenses.
If you are facing state or federal mortgage fraud charges, time is of the essence. A conviction of mortgage fraud has incredibly serious consequences. Attorney Steven Jumes will fight hard for your rights throughout the entire process. Contact our Texas mortgage fraud defense law firm today to schedule your initial consultation.