Despite the fact that the mortgage industry is strictly regulated at both the state and federal level, mortgage fraud is common in Texas. Mortgage fraud is a serious offense that can result in serious penalties including a lengthy prison sentence, fines and restitution. This makes consulting an experienced mortgage fraud defense attorney crucial.
What is mortgage fraud?
Mortgage fraud involves the use of false information on mortgage documents to defraud a lending institution. If the lender is a federally insured institution, federal charges can apply. In addition, mortgage fraud typically involves other offenses such as mail fraud and wire fraud. Common mortgage fraud schemes include:
- Providing false identification and financial information (e.g. forged pay stubs, W-2s, tax returns, financial statements) to a lending institution
- Artificially inflating the value of a home or other property in a real estate appraisal to obtain a higher loan amount or to make greater profits in a resale (often connected with “flipping”)
- Using a “straw buyer” in a property flipping scheme to qualify for a loan and to conceal the identity of an “investor”
- Taking out a second mortgage with another lender to make the down payment on a first mortgage, without the first lender’s consent or approval
- Taking out a mortgage loan, renting out the property until it goes into foreclosure, and keeping the loan proceeds (“equity skimming”)
Who is involved with mortgage fraud?
Mortgage fraud typically involves the collaboration of mortgage brokers, investors, real estate professionals (e.g. appraisers, title insurance abstract companies), and, at times, even homeowners and buyers. Ultimately mortgage fraud schemes are designed to unlawfully obtain a financial profit or funding for a property.
Penalties for Mortgage Fraud
Because mortgage fraud can involve crimes at both the state and federal level, the potential penalties can vary. Under Texas law, the penalties for mortgage vary, depending on the monetary value involved.
Offenses that involve $1,500 or less, for example, are considered misdemeanors, punishable by fines, probation and short jail time. Mortgage fraud cases typically involve greater sums of money, however.
For fraudulent conduct involving an amount between $30,000 and $150,000, mortgage fraud is considered a third-degree felony, punishable by up to 10 years in prison. On the other hand, fraudulent conduct involving an amount of $300,000 or more is a first-degree felony, punishable by up to 99 years in prison and fines up to $10,000.
Why This Matters
If you have been charged with mortgage fraud in Texas, you face an uncertain future. The loss of your freedom and lasting damage to your reputation from having a permanent criminal record can interfere with future employment and housing opportunities. The best decision you can make to protect your rights and your future is consult the experienced mortgage fraud attorneys at Benjamin Law Firm.
Posted in: Mortgage Fraud