The purchase of a home is a complicated process involving numerous agents and entities. It is also an expensive venture, and the exchange of hundreds of thousands of dollars is common. For some, these matters may lead them to commit fraud. In the real estate world, the potential for fraud occurs at every stage and with every player.
If you are facing accusations of mortgage fraud, you have good reason to be concerned. Widespread mortgage fraud has been responsible for several national financial crises, so California and federal laws are harsh when it comes to dealing with those convicted of this white-collar crime. You would be wise to learn as much as you can about the offense and the potential consequences if a court convicts you.
Fraud and its consequences
Whether you are an individual who is purchasing property or one of the many people who have a hand in the mortgage process, you have many opportunities to misrepresent the information necessary for obtaining a loan. Mortgage fraud can include providing false information to obtain a mortgage you could not otherwise afford, or it can involve a more complex scheme to increase the profits on a real estate transaction. Some of the common forms of mortgage fraud include these:
- Individuals who invest in a residential property with the undisclosed intention of using it as a rental
- Loan agents who misrepresent a client's financial situation or the value of a property to gain higher profits
- Straw buyers who allow potential buyers to use their good credit or identity to obtain a mortgage for which they may not otherwise qualify
- Individuals who steal the identity of others to qualify for a mortgage
- Groups who work together to obtain a mortgage for a buyer and property that do not exist so they can pocket the cash
- Real estate agents and appraisers who overvalue or undervalue a property to increase the amount they make on a commission or to improve the chances the buyer will obtain the mortgage
These are only a few of the methods for committing mortgage fraud. Some may seem insignificant, but each example of fraud adds to the instability of the economy. Federal authorities take such actions seriously, and a conviction may mean severe penalties. Chances are good that investigators have been gathering evidence against you for some time, and you would be wise to seek the advice of a legal professional who has thorough knowledge and extensive experience defending against these charges.