Due to the housing crisis, the FBI has prioritized mortgage fraud for profit cases. Although borrowers do commit mortgage fraud to obtain housing, the bigger concern is when industry insiders use their knowledge to misuse the mortgage lending process and steal equity or money from borrowers or lenders. The FBI broadened the definition of mortgage fraud following the housing crisis, which has led to more charges being filed against perpetrators.
Types of mortgage fraud
Generally, these types of fraud involve perpetrators misleading homeowners into renegotiating a loan or saving a home from foreclosure. They allow the property to go into foreclosure, causing the homeowners to lose all their equity. But other types of fraud involve inflating an appraisal or using straw buyers to obtain a loan.
- Foreclosure rescue schemes
- Loan modification schemes
- Illegal property flipping
- Builder bailout
- Equity skimming
Bank officers, brokers, loan originators, appraisers or other professionals involved in the sale are typically the ones who may commit fraud. The Financial Crimes Task Forces work with federal, state and local authorities and within private entities to find such people who are committing mortgage fraud.
Protect your rights
It is possible that you could receive a mortgage fraud charge, even if another party to the sale was actually the one who intended to defraud. A defendant charged with mortgage fraud may have been trying to help out a homeowner, in which case a lawyer may argue that there was no intent.
Criminal charges of mortgage fraud are serious. You could lose your professional license, have to pay a fine or have to serve jail time if the court finds you guilty. Even if you are innocent of the charges, the accusation could destroy your reputation. When you speak to the prosecutors, you could inadvertently make a statement they can use against you. If you suspect that you might be charged with mortgage fraud, you should consider talking to an attorney as soon as possible.