Florida is an attractive state for homebuyers. Many people move into condominiums, apartments and luxurious beach homes after retirement. Some head over for the balmy weather and ocean views. Unfortunately, bad real estate deals happen often, and buyers could be in for a rude awakening.
Real estate fraud occurs when a person uses false information to take advantage of someone else during a real estate purchase. This type of criminal fraud can take many different forms and sometimes involves mortgage loan fraud, as well. There are two main categories, which include:
- Borrower fraud involves falsifying loan applications, misrepresenting a person's credit and hiding important information during a transaction.
- Lender or professional fraud involves property flipping, false advertising and identify theft.
Borrower fraud happens when a person is trying to obtain title to the property. In comparison, lender or professional fraud happens when a person attempts to profit from the transaction. Both categories of fraud can take a variety of forms, such as rental fraud, land fraud and equity skimming.
Criminal penalties for real estate fraud
There are steep penalties for both real estate fraud and mortgage fraud, which encompasses all illegal practices involved.
According to Florida Statute 817.545, a person has committed fraud if they acted knowingly and intended to defraud another person. Not only did they defraud a person, but they defrauded a lending institution by misrepresenting facts to obtain a loan.
The court will consider many documents used in the real estate process, such as:
- Mortgage documents
- Inspection reports
- Residential loan applications
- Payroll stubs
- Relevant disclosures
Any misrepresented information in these various documents could determine fraud. While the penalties depend on the offense, they could include fines, prison time, restitution and probation. Fines for real estate fraud tend to be high, sometimes up to $1 million. Federally prosecuted offenders can spend up to 30 years in jail.
If you have been charged with real estate fraud, you should contact an experienced attorney immediately. Due to the severity of the penalties, it's important to ensure you are strongly represented in court.