How to Avoid Mortgage Fraud

Do you believe you’re being charged with mortgage fraud? Are you being investigated and you want to avoid legal issues?

Mortgage fraud is a serious federal crime. It’s imperative you understand the situation, assert your rights, and hire a lawyer that can help guide and represent you.

We’ll discuss mortgage fraud in more depth, as well as go over the two types. We’ll also instruct you on which steps to take if you’re being charged or investigated for mortgage fraud. Keep reading to discover what you need to do next.

Types of Mortgage Fraud

The FBI classifies mortgage fraud as a misrepresentation, a material misstatement, or an omission that relates to mortgage loans, which are then relied upon by lenders.

There are two kinds of mortgage fraud. These include fraud for housing and fraud for profit.

Fraud for Housing

When a borrower is motivated to purchase or maintain ownership of a property, they may resort to illegal actions to do so. For instance, someone may misrepresent their income information on a loan application. 

Fraud for Profit

Often this type of fraud is a result of industry insiders using their knowledge to either commit fraud or facilitate it. Industry insiders include attorneys, appraisers, bank officers, and so on.

The goal of fraud for profit isn’t to acquire a house but to illegally profit from lenders and homeowners. Fraud for profit abuses the mortgage lending process.

Common Examples of Mortgage Fraud

Mortgage fraud is a fairly broad legal term. As such, there are many examples of what would count as mortgage fraud. Examples include:

  • Inflated appraisal
  • Stolen identities
  • Silent second
  • Equity skimming
  • Straw buyer
  • Falsified supporting documentation
  • Illegal property flipping
  • Foreclosure rescue scheme
  • Loan modification scams
  • Home equity conversion mortgage
  • Air loans

These are just a few of the many examples of what could count as mortgage fraud.

Avoiding Mortgage Fraud and Legal Issues

If you’ve been indicted or you think you’re under investigation for mortgage fraud, you need to hire an experienced mortgage fraud defense attorney to avoid any legal issues.

An attorney can walk you through the process, discuss strategies, define legal terms, and explain your rights to you. Since mortgage fraud is a federal offense with serious consequences, you’ll want to take this step as soon as you believe you’re under investigation or if you’ve been charged.

If you want to avoid mortgage fraud charges, a defense attorney must convince the judge or jury of the following:

  • You were falsely accused
  • The information you provided on your mortgage loan application was true and accurate
  • You did not mean to break the law and were in good faith
  • The prosecutors do not have sufficient evidence for a conviction

If your attorney can convince the judge of at least one or more of the above statements, you may avoid charges.

Protect Yourself From Mortgage Fraud Legal Issues

Mortgage fraud is a federal offense with major consequences, but having the right representation to defend you can help you avoid legal issues. Use our tips and steps above to find the right defense attorney for you.

For more informative articles like this one, check out the other sections on our website before you go.

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