According to the California Association of Realtors, this year mortgage fraud has increased by 60 percent throughout the country. The rise in mortgage fraud is part of an ongoing trend over the past few years. The Federal Bureau of Investigation has seen a significant rise in mortgage fraud cases since 2008.
Studies show that California is among the states with the highest rates of mortgage fraud. California ranks as one of the top nine states with cases of mortgage fraud per capita. The Los Angeles-Long Beach-Santa Ana area is one of the top metro areas in the nation for mortgage fraud.
What Is Mortgage Fraud?
Generally, mortgage fraud is considered any “material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.” There are several types of crimes that are covered under this law: foreclosures scams, loan modification scams and fraud for property.
Foreclosure scams – A foreclosure scam generally occurs when someone offers to purchase a property from a homeowner facing foreclosure, in order to help the homeowner keep that property. Instead, the person will do nothing on behalf of the homeowner and will oftentimes sell the property from under the homeowner.
Loan modification scams – These crimes occur when someone promises to change the terms of a homeowner’s mortgage – which includes things such as lower interest payments and lower monthly payments – and then charges exorbitant fees and performs none of the services promised.
Fraud for property – Fraud for property occurs when someone gives false information on a loan application or steals someone’s identity to obtain a home loan. Falsifying loan documents, including employment records and tax records are forms of fraud for property.
There are many types of mortgage fraud. All of them have serious consequences.
Penalties for Mortgage Fraud
Mortgage fraud is a serious charge, and although it is sometimes prosecuted as a misdemeanor, more often it charged as a felony. Penalties for an individual felony mortgage fraud charge could be up to three years in prison and a fine of $10,000. It is not uncommon, however, for individuals to face multiple mortgage fraud charges and lengthy prison terms.
Do You Need Legal Advice?
If you’ve been charged with mortgage fraud, you should speak to an aggressive and experienced mortgage fraud lawyer as soon as possible. A lawyer with a strong background representing clients facing financial crime charges can help you to protect your rights and fight the charges against you.