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Mortgage and Loan Fraud

The mortgage and lending industry is highly regulated, so any paperwork error or other minor mistake made by an employee can easily lead to charges of fraud. Although, prosecutors are required to prove that a defendant intended to commit fraud in order to obtain a conviction, defendants could sustain irreparable damage to their reputation in the time it takes to dismiss the charges. To ensure that this doesn’t happen to you, please contact an experienced white collar crime lawyer who can evaluate your case and help defend your interests.

Defining Mortgage Fraud

Mortgage fraud is characterized by some kind of misrepresentation, omission, or misstatement in relation to a loan, which is then relied upon by the lender. To qualify as fraud, the omission or misstatement must be material, which means that it could influence a bank’s decision on important issues, such as whether to approve a loan, agree to amended repayment terms, or accept a reduced payoff.

Fraud for Profit

There are two main types of mortgage fraud, which are known as fraud for profit and fraud for housing. Bank officers, appraisers, and mortgage brokers are most commonly accused of the former, which involves the use of insider information and specialized authority or knowledge to facilitate or commit fraud. Unlike fraud for housing, fraud for profit is not aimed at securing housing, but is instead intended to somehow take advantage of the mortgage lending process to steal equity or cash from homeowners or lenders. For instance, companies that renegotiate the terms of homeowner loans are often accused of demanding large fees and negotiating unfavorable terms for their clients, which falls under the umbrella of mortgage fraud.

Fraud for Housing

Fraud for housing is usually committed by borrowers who are motivated to maintain or acquire a home. The most common examples of activities that are charged as fraud for housing include:

  • Misrepresenting income or asset information on a loan application; or
  • Convincing an appraiser to misrepresent a property’s value, which usually involves one or more of the following activities: falsifying loan documentation, inflating a buyer’s income, conducting a fraudulent appraisal, or providing kickbacks to buyers.

Although fraud for profit schemes are usually prioritized by prosecutors, charges of mortgage fraud involving housing should not be taken lightly, as even claiming that a home will be used as a primary residence on a loan application can come with serious penalties, including ruinously expensive fines and in some cases, prison time.

Call Today to get the Legal Representation You Deserve

Because prosecutors and government officials are so wary of mortgage fraud schemes, many clerical mistakes and filing errors are used as the basis for official criminal investigations, which can end up leading to allegations of fraudulent activity. These types of charges can have serious consequences, so it is critical to begin formulating a strong defense immediately. If you are being investigated for involvement in a mortgage fraud scheme in Miami, please contact experienced white collar crime attorney Jeffrey S. Weiner, P.A. at (305) 670-9919 for a free case evaluation.

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