Purchasing a home is a major goal for many New York residents, and most home purchases involve borrowing money through a mortgage. Unfortunately, almost everyone has heard of mortgage fraud and there are several ways mortgage fraud can arise.
Two main types of mortgage fraud
Mortgage fraud can be committed by an individual applying for a mortgage to obtain housing in a “fraud for housing” scam, or someone working in the mortgage industry for financial gain, called a “fraud for profit” scam. A fraud for housing scam involves a potential borrower who intentionally lies about their financial circumstances to be approved for a mortgage or approved for a higher amount than they otherwise would be.
Fraud for profit mortgage scams typically involve different players in the mortgage industry, such as bank executives, loan officers or mortgage brokers. The goal of this type of fraud is to use insider knowledge of the mortgage process to illegally take money from a borrower or lender.
A mortgage fraud conviction can result in major penalties. An individual convicted of mortgage fraud could receive financial penalties such as fines, restitution for current or future losses or even jail time. Obtaining a mortgage after a conviction may be difficult to impossible, and those working in the mortgage industry could lose their entire career or reputation.
Fighting a mortgage fraud charge
There are various potential defenses to a charge of mortgage fraud. A borrower may not have intentionally falsified financial information but may have accidentally provided inaccurate information. Additionally, the prosecution must have extensive evidence to prove mortgage fraud.
A charge of mortgage fraud should be taken seriously. Facing a mortgage fraud charge alone can be distressing and confusing. It is best to not speak with anyone investigating the charges until receiving advice from an experienced professional who can analyze the specific facts of the situation and discuss potential defenses.