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What forms can mortgage fraud take?

On Behalf of | Sep 26, 2014 | White Collar Crimes |

Mortgage fraud came to be front-and-center in the public’s gaze in the aftermath of the housing crisis. In light of this, federal authorities have been remarkably aggressive in recent years in their prosecution of individuals suspected of mortgage fraud. Accusations of this type of fraud can result in a person facing federal charges, such as charges of bank fraud, wire fraud or conspiracy. Significant potential sentences are attached to these sorts of charges.

What sort of conduct constitutes mortgage fraud? Generally, mortgage fraud involves the making of some kind of misstatement or misrepresentation during the mortgage application process for a gain. Mortgage fraud can take many different forms. Today, we will discuss some of the more commonplace forms of this type of white collar crime.

Some mortgage fraud schemes involve lying about the borrower’s identity in a mortgage fraud application, such as using a stolen identity, a fictitious identity or the identity of a straw buyer. Straw buyer mortgage fraud schemes are ones in which the person who is represented as the borrower isn’t actually the borrower, but rather is being represented as such to shield who the borrower actually is. One type of scam that straw buyers are used in are equity skimming scams, in which an individual, after having received a mortgage loan through the use of a straw buyer, doesn’t actually make any payments on the mortgage loan, but rather just makes the property available for rent until it goes into foreclosure.

Another thing that mortgage fraud sometimes involves is colluding with an appraiser to have an improperly high property appraisal included in a mortgage fraud application. One scheme type involving inflated appraisals are property flipping schemes. This is when, soon after the buying of a property, a falsely inflated appraisal is obtained and the property is resold using this fraudulent appraisal.

Another common form of mortgage fraud is the creation of false supporting loan documents and the inclusion of such documents in an application.

These are just some of the more typical forms mortgage fraud takes, there are many other types of mortgage fraud schemes.

If a person is accused of any form of mortgage fraud, they can find themselves facing potentially life-altering criminal proceedings. White collar crime defense attorneys can help such individuals construct a defense strategy that takes into account their specific situation.

Source: FindLaw, “Mortgage Fraud,” Accessed Sept. 26, 2014


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