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Mortgage fraud is not codified under a Federal Statute, however, it typically refers to the illegal activities taken to obtain a mortgage or to obtain profit from the sale of a property based on false or fraudulent documentation.
Even though there is no specific “Mortgage Fraud” statute, like wire fraud or mail fraud, Mortgage Fraud is still being investigated and prosecuted by the federal government. Mortgage Fraud is typically prosecuted under an associated fraud charge, such as: Continuing Financial Crimes Enterprise (18 USC § 225); Credit Institution Fraud (18 USC § 1006); Housing and Urban Development (HUD) & Federal Housing Administration (FHA) Fraud (18 USC § 1010); or False Statement on Loan Applications (18 USC § 1014).
Each associated charge has something to do with the mortgage application and loan process, allowing federal prosecutors to bring charges against an individual without it explicitly being designated as “Mortgage Fraud.”
Mortgage Fraud can occur in several ways. However, most will fall into one of two categories: Fraud for Property or Fraud for Profit.
The punishment for mortgage fraud depends on the offense level, but generally speaking, it can range from 0 to 20 years in federal prison. An experienced mortgage fraud lawyer can look at the allegations of your case and advise you of the potential consequences.
In February of 2022, six Houston residents were indicted for participating in a multi-state scheme involving mortgage fraud, credit repair, and government loan fraud. These individuals could face up to 30 years in federal prison. This fraud involved applicants, realtors, and even mortgage brokers submitting false or fake documents and, in some cases, “cleaning” clients’ credit histories for a favorable application.
With the rise in popularity of “fixer-upper” style TV shows, the market to “flip” houses has also become increasingly popular. To flip a home, a buyer will purchase a run-down or outdated house to sell the house at a higher price for a profit. While this process is not illegal, it can turn into an unlawful property flip by using a straw purchaser or procuring a fraudulent appraisal. With the volatile housing market after Covid-19, there has been an increased number of home “flips” that could lead to illegal home flips.
The FBI and Department of Justice have already been investigating crimes relating to illegal home flips. Still, it is possible to see an increase in these prosecutions in the after-effects of Covid-19.
If you or a loved one is under investigation or has been accused of mortgage fraud, it’s imperative to contact a skilled federal defense attorney as soon as possible. Our team has vast experience handling complex federal cases, including various types of fraud and white-collar crimes. We will thoroughly investigate your case and build the strongest defense strategy possible. Call 817-203-2220 today for a consultation with an experienced federal criminal defense attorney.