Mortgage fraud is typically defined as a crime that can involve both borrowers and lenders and it occurs when someone confuses, lies or intentionally omits important information during the mortgage application and approval process. This mortgage fraud usually comes in the form of money laundering, wire misrepresentation, bank extortion and mail fraud. There have been cases of bankers, real estate agents, and loan officers that have been charged with mortgage fraud; this implies the use of different types of techniques such as inflating property values, manipulating qualification measures, and forging of signatures. Being charged due to mortgage fraud is a serious case, and if you or one of your family members have been accused of this in Long Beach CA, click here to know your options and solutions about the offense committed.
There are two types of mortgage fraud, and they can be performed by a lender or a borrower:
- Fraud for housing: When someone wants to buy a house and apply for a mortgage they will have to submit an application to the lender. But if the borrower intentionally makes misstatements, misrepresents, or relevant information that is considered as mortgage fraud. Is known as fraud housing because the borrower it is not seeking to make a profit from the fraud but lying to obtain the house.
- Fraud for profit: It often involves complicated schemes and collaboration by multiple parties such as real estate appraisers, mortgage brokers, accountants, attorneys, investment bankers and even credit agencies. The primary purpose of these schemes is to make money without getting a house for a buyer.
These are the penalties for mortgage fraud crimes
Mortgage fraud is usually charged as a felony offense, but misdemeanor offenses are possible too in cases where only a small amount of money is involved, less than $1,000.
- Prison: A conviction for federal mortgage fraud charges can result in a federal prison sentence for 30 years, this usually happens when the fraudulent scheme is professionally planned. If it´s a misdemeanor crime, jail sentences will be of one year or more.
- Fines: Fines for mortgage fraud are extremely high, especially when fraud for profit is involved. The fine for this type of fraud is about $1 million dollars. State fines can range from a few thousands of dollars for misdemeanor convictions and $100,000 for felony convictions.
- Restitution: This is different that a fine, restitution is designed to compensate the injured party for the fraud, this means that you will have to pay restitution to the lender in addition to your fines.
Mortgage fraud offenses are severe, and convictions for this crime can mean that you might spend the rest of your life in jail. If you, a relative, or a close friend can´t afford the bail to avoid incarceration, it is recommended to contact a bail bond agent and a criminal defense attorney to assess you with the legal advice that you need. Here is a video that might help you understand better the consequences and the meaning of mortgage fraud offenses.