Mortgage fraud encompasses a variety of illegal schemes relating to funding, purchasing or insuring loans and can be committed by individuals as well as professionals in the industry.
If you’re under investigation or have been charged with a crime relating to mortgage fraud, you could face serious penalties. Before speaking to the FBI or police investigators, call a criminal defense attorney to explain your options. For twenty-five five years, Attorney Michael J. Petro has been working in Federal Court representing individuals charged with financial crimes including mortgage fraud. Calling Mike is the best first step to protecting your freedom and assets from seizure.
What Constitutes Mortgage Fraud?
Since federal statutes do not reference mortgage fraud directly, mortgage fraud schemes typically are prosecuted as under the bank fraud, wire fraud or mail fraud statutes.
Illegal mortgage schemes are complex prosecutions that usually involve mortgage industry professionals and private individuals working together to commit fraud. A significant percentage of mortgage applications contain erroneous information, but simple errors and omissions can cross over into criminality when they are done intentionally by the participants.
For individuals, mortgage fraud occurs through lying or intentionally leaving out significant information when applying for and being approved for housing loans. Either the federal government or the state of Illinois can prosecute crimes that fall under the umbrella of mortgage fraud.
The Illinois Mortgage Fraud Task Force has authority to probe all parts of residential real estate transactions, including property listings, closings, and sales transactions. The task force has taken punitive action against more than 100 people and has assessed fines of more than $2 million.
Types of Mortgage Fraud
Mortgage fraud generally involves two parties: someone submitting a mortgage application and a bank or other financial institution that uses the information on the application to grant a loan. Several different types of activities — such as knowingly submitting a false income statement, false appraisals or other documentation — can constitute mortgage fraud.
A number of other common actions also fall under the umbrella of mortgage fraud. For instance, “straw” buyers may use the identity of another person to get a mortgage, including submitting that individual’s credit and income history. In some cases, the identity used in the fraud is a stolen identity-constituting another crime.
Taking out a second mortgage to cover a down payment on a first mortgage is another form of mortgage fraud when it is done without the knowledge of the primary lender.
In some cases, bank officers or other professionals conspire with buyers to perpetrate fraud. In property flipping, a buyer purchases a piece of real estate that is then appraised at an artificially inflated value. The property then is resold at a profit.
Mortgage Fraud State & Federal Penalties
Both state and federal authorities can prosecute individuals and organizations for crimes related to mortgage fraud. Many mortgage fraud cases are prosecuted by the federal government because they involve federal agencies like the Federal Housing Administration, or they involve FDIC insured banks and other federally regulated organizations.
Whether prosecuted by the State of Illinois or the United State’s Department of Justice, mortgage fraud is a felony crime subject to severe penalties. A conviction on federal or State charges of mortgage fraud can result in up to 30 years imprisonment and fines in the millions of dollars. A mortgage fraud conviction also may result in a requirement to make restitution to an injured party such as a lender.
Defending Against Mortgage Fraud Charges in Illinois
One potential defense against mortgage fraud charges is that the person didn’t knowingly cheat or deceive the lending bank. A crime is committed only when an individual knowingly provides or knowingly fails to provide false information with the intent to deceive or cheat the lending bank. If the lending application information is omitted mistakenly, a mortgage crime did not occur.
Attorney Michael J. Petro uses his knowledge of the law and criminal procedure to formulate the most effective defense possible for you and keep you out of jail. For an initial consultation, please contact Chicago Criminal Defense Attorney Michael J. Petro.