When you think of fraud allegations, you probably are reminded of wire fraud and bank fraud. However, you might not know that there is a specific subset of fraudulent activities that has to do specifically with home purchases. Mortgage fraud is defined as an illegal scheme involving misrepresentation on a mortgage document. Although it may not seem like a criminal act to fudge a little on your income -- or to "doctor" the numbers on your property appraisal -- this is actually a serious crime that could lead to long-term legal and financial consequences.
Why do we care so much about mortgage fraud? Mortgage fraud is a hot topic within federal government circles, all thanks to the Fraud Enforcement and Recovery Act, which was passed in 2009. Federal law enforcement officials now enjoy far more power when it comes to enforcing fraud laws related to mortgage violations. Although federal statutes do not formally list the term "mortgage fraud," authorities do pursue wire fraud, conspiracy and bank fraud charges under this piece of legislation.
What constitutes mortgage fraud?
Officials have categorized mortgage fraud into two primary groups. First is fraud for profit, in which a real estate professional commits a fraudulent act with the goal of extracting more money from a sale. The other type of fraud is known as fraud for housing; these violations occur when borrowers submit fraudulent information in the hopes of qualifying for a better loan.
How is mortgage fraud perpetrated?
There are many mechanisms for committing mortgage fraud. In some cases, they can even include the use of a fraudulent identity or falsified loan documentation. If you have been arrested for federal violations related to mortgage fraud, all is not lost. You may still have some legal options. Consulting an experienced attorney is essential in the days following your arrest and indictment.
Source: FindLaw, "Mortgage Fraud" Oct. 06, 2014