Mortgage Application Fraud Lawyers
Buying a home is one of the best long-term investment decisions that you can make. When you are looking to buy a home you will likely need to take out a mortgage to finance the purchase of the property. when you are applying for a mortgage, you will find that there are many different documents and pieces of information that you will need to provide to the lender. It is always assumed that all of the information that you do provide is accurate and that you are being as honest as possible. If you do not provide accurate information to a mortgage lender, you could technically be in violation of mortgage application fraud.
Types of Mortgage Fraud
The most common type of mortgage fraud occurs when an individual falsified information on their mortgage application. When you do this, you are not giving a lender enough accurate information for them to make a fair decision. In some situations, they may end up making a lending decision based on this inaccurate information.
Another type of mortgage fraud is when somebody else is involved in the falsification of records. For example, when you purchase a home, you will need to provide the lender with an appraisal. If someone who is involved in the preparation of the appraisal uses false information or overvalued the value of the property, they could be in violation of both mortgage application fraud and appraisal fraud.
Appraisal fraud can also occur if someone tries to apply for a mortgage in the name of someone else. While this is less common, it has happened in the past where someone tries to purchase a property and take out a mortgage in the name of somebody else entirely. This is normally part of a larger identity theft scheme.
Indications of Fraud
Today, most mortgage lenders are involved in a wide variety of compliance and fraud detection processes that have allowed them to better identify when mortgage fraud has taken place. The most common examples of identifying mortgage fraud occur when information received doesn’t seem to match to prior records. For example, if you receive a type of report that shows the borrower suddenly has an incredible increase in liquidity, it could be a big indication of fraud. Mortgage lenders are also wary of fraud if a borrower omits certain information or does not completely fill out an application.
Penalties for Mortgage Fraud
While it would seem as if mortgage application fraud is not a very significant issue, those that are found guilty of it could be facing some significant penalties. Ever since the mortgage and housing crisis in the mid-2000s, there have been many tougher rules placed that govern mortgage fraud. One of the main governing rules over mortgage fraud is the Fraud Enforcement and Recovery Act of 2009, which is a federal law.
Those that are charged and found guilty of mortgage fraud could face fines of up to $100,000. While mortgage fraud is normally not a crime that will come with a prison sentence, the law does provide for sentences of up to 30 years. The total amount of the punishment will normally vary based on the scope of the fraud and what the total cost is if it led to a loss for a mortgage lender.
Defending the Charge
When you are charged with mortgage application fraud, your mortgage application fraud lawyer will be able to use a variety of defense options to try and beat the charges. One of the most common ways to do this is to state that you did not know you were being fraudulent when you were filling out the application. While all people are required to fill out the applications accurately and honestly, there are dozens of pages of information that need to be submitted. Because of this, it is easy to say that you made a mistake when filling out the form. In these situations, you might be able to have the charges dropped.
Another option is to state that your rights were violated during the investigation. Depending on how the charges came about, the prosecutors may have not received the proper approval to gain access to the information they needed to file these charges. If this is the case, you could have the charges dropped entirely.