Miami Federal Crime Attorney
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Mortgage Fraud: A Federal Offense

Mortgage fraud is a crime where the individual intends to materially misrepresent or omit information on a mortgage loan application in order to obtain a larger loan as compared to what would have been legitimately obtained had the lender known the truth about the applicant's situation. In the United States federal courts mortgage fraud can be prosecuted as bank fraud, mail fraud, money laundering, and wire fraud.

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Types of Mortgage Fraud

Some of the common forms of mortgage fraud include occupancy fraud and income fraud. With occupancy fraud the borrower wishes to obtain a mortgage on an investment property, but instead of stating that fact they falsely claim that they will be occupying the property as their primary residence or as a second home. Since investment properties have higher delinquency rates, lenders charge higher rates for non-owner occupied homes; therefore, this is one of the more common forms of mortgage fraud and abuse.

With income fraud the borrower overstates his or her income in order to qualify for a larger loan amount. This is typically seen with "stated income" mortgage loans where either the borrower or the loan officer overstated the income needed for loan approval. Since today's lenders no longer offer stated income loans, income fraud in the modern sense occurs where borrowers alter or forge W-2 forms, tax returns or bank account records.

Other forms of mortgage fraud include employment fraud, which is where the borrower claims self-employment from a non-existent company or claims to be in a higher position in a real company. Mortgage fraud can also include the failure to disclose liabilities, fraud for profit, appraisal fraud, cash-back schemes, identity theft and others.

What are the penalties for mortgage fraud?

Mortgage fraud can be perpetuated by the borrower, the loan officer who originates the mortgage, a real estate agent, an appraiser, by a title or escrow agent, or by any combination thereof. What's more, stakeholders may actively encourage and assist borrowers in committing fraud since most participants are compensated when the transaction closes. Mortgage fraud is investigated by the Federal Bureau of Investigation and is punishable by up to 30 years in federal prison, or a $1,000,000 fine, or both.

Contact a Miami Mortgage Fraud Lawyer

According to the FBI, it is against the law for any person to make false statements regarding income, assets, debt, identification or to intentionally overvalue land or property in a loan application for the purpose of influencing any financial institution.

If you are facing any federal charges related to mortgage fraud, you are urged to contact Joel DeFabio, PA for an immediate and aggressive federal criminal defense.

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