Mortgage Fraud: Plan on Going to Jail If You Don’t Hire an Attorney
When the housing market crisis reached its peak several years ago, law enforcement noticed a sharp increase in the frequency of mortgage fraud cases. It is possible that people were taking advantage of market confusion to execute fraud schemes or that corruption was allowing fraud to increase. Whatever the reason, patterns and similarities began to emerge in the types of fraud schemes that were being attempted.
By itself, mortgage fraud is not the name of a criminal offense. It is a blanket term that is used to refer to a number of different crimes that are perpetrated in the context of the housing market. Mortgage fraud can include instances of wire fraud, mail fraud, money laundering, bribery and corruption.
In short, mortgage fraud is any attempt to obtain money from the housing market through the use of deceit or false information.
How Mortgage Fraud Works
There are many different forms that housing fraud can take. To better understand this practice, it is helpful to consider a typical example of this kind of crime.
In one scheme that was frequently discovered during the housing market boom, a homebuyer and a real estate appraiser would work together to defraud a bank or a lender. The homebuyer would submit a loan application to a lender along with an estimate of the property’s value from an appraiser. The appraiser would significantly overstate that value of the property. This would trick the lender into loaning more money to the homebuyer.
The buyer could then purchase the property and split the extra cash with the appraiser. This is known as appraisal fraud.
Other common types of housing fraud include:
- Overstating income on loan applications
- Identity theft
- Failing to disclose credit history
- Inflating real estate prices
Am I Going to Jail for Mortgage Fraud?
Even though federal offenses can be punished harshly, jail time is not guaranteed. In fact, many housing crimes can appear similar to legal and legitimate practices.
For example, it is not illegal for a buyer to purchase property, renovate it and then sell it for a profit. However, this activity has some similarities to fraudulent property flipping, which is illegal.
Circumstances like these make a legal defense possible. A defense attorney can argue that a defendant was only trying to make money in a legal, ethical way by investing in the housing market. Federal charges are very serious and should be handled carefully but a good defense can prevent jail time and other penalties.
Hire a Criminal Defense Attorney
The line between legal and illegal is often blurry. Sometimes, an individual may think he is acting in a legal manner when he is arrested by law enforcement. If you are in this situation, then you should speak with James Alston to determine the best plan of attack.