Mortgage fraud is a white collar crime where someone knowingly makes a false statement in order to impact a bank’s decision on providing a loan. The statement can be a misrepresentation or a complete omission related to a mortgage. The crime can be associated with a loan’s initial approval, reduction of payoff amount or repayment terms. You will not be prosecuted for accidental mistakes on an application.
When you are accused of mortgage fraud, you could face charges for a federal crime. Even though there is no federal law directly prohibiting mortgage fraud there are crimes connected to the act of fraud. Because of the severity of any mortgage fraud charges you need a skilled white color criminal defense lawyer to help you with your case right away.
Our attorneys at Grewal Law PLLC are ready to defend you against state or federal charges associated with mortgage fraud. Call us at (888) 211-5798 for your no obligation quote because we are ready to defend you.
Federal Fraud Charges
Under the Fraud Enforcement and Recovery Act (FERA) you can be charged for bank fraud, wire fraud or conspiracy. The 2009 law allows federal law enforcement to prosecute a variety of fraud allegations including those associated with mortgages. There is a statute of limitations of ten years for prosecution of these charges. However, if an individual leaves the country to avoid charges there may be an extension to the ten-year timeframe.
The two areas typically investigated by the FBI are as follows:
- Fraud for Housing – occurs when borrowers use illegal action in order to gain or maintain the ownership of a home.
- Fraud for Profit – when mortgage brokers, bank officers, appraisers or other professionals in the housing industry who use the mortgage process to gain equity or cash from homeowners or lenders.
Types of Mortgage Fraud
There are a wide range of crimes associated with mortgage fraud. Federal authorities investigate an array of schemes including the following types of fraud:
- Inflated appraisal– where an appraiser along with a loan officer or mortgage broker provide an unrealistic appraisal with a high value to get a buyer in order to close a sale.
- Loan modification scams – offering of fake government modification programs to a homeowner if they provide an up-front fee.
- Illegal property flipping – when a property is bought at a lower price then falsely appraised in order to resell it at a higher price. The value is artificially inflated in order to allow the buyer to get a bigger loan than required for the property allowing the purchaser to keep the difference.
- Straw buyers – a person buying a property hides his or her identity by using another person’s identity to make a loan application.
- Equity skimming – when an investor uses a straw buyer to obtain a mortgage. Once the property is closed on the straw buyer signs it over to the investor. The investor then rents out the property without making any payments on it waiting until the property is foreclosed.
- Silent second – a property owner takes a second mortgage to cover the down payment on an initial loan for another property.
Depending on the type of crime, a person convicted could face up to 30 years in federal prison along with fines up to $1 million dollars.
Michigan Residential Fraud Charges
Under Michigan law, you can be charged with a felony related to residential mortgage if you knowingly make a false statement or misrepresentation during the mortgage lending process. These include a range of crimes with varying penalties for convictions range depending on the value of the mortgage.
If convicted, you could face the following punishment:
- Imprisonment for up to 15 years along with fines of up to $100,000 or a combination of both prison time and fines.
- If the value of the loan exceeds $100,000 then you could face up to 20 years in jail along with fines up to $500,000 or a combination of both.
Mortgage Fraud Defense Attorneys in Michigan
The Michigan mortgage fraud attorneys at Grewal Law PLLC have the necessary experience to defend you against federal and state charges. Contact us right away when first accused of mortgage fraud before any charges are formally filed. If you have already been charged, our experienced legal counsel will craft a defense to help you avoid thousands of dollars in fines or years in prison.
Call our mortgage fraud attorneys today at Grewal Law at (888) 211-5798.