Mortgage Fraud

Mortgage fraud in Miami occurs when someone knowingly confuses, lies, or omits data during the mortgage application process. Lenders and borrowers alike are capable of committing this crime. There is a special law in Florida that protects mortgage fraud. Nevertheless, in several cases, litigation is carried out at the state level. It usually consists of profit fraud or housing fraud.

The key difference in deciding whether there is fraud for profit or housing fraud is in who is being deceived: the prospective homeowner, or the lender. Profit fraud is usually committed by those with deep mortgage industry knowledge who find out how to work the system to procure cash, while homeownership is not the objective. Housing fraud, as the name suggests, is committed with the intention of obtaining or retaining homeownership by a prospective homeowner.

Mortgage fraud is a highly involved crime that may affect borrowers and lending institutions alike. It is assumed that about ten percent of all mortgage applications in the nation have vital information omitted, whether they be erroneous or deliberate. It is not easy to prove deliberate omission, however, and this is one of the reasons why convictions for mortgage fraud are not as common of an occurrence when it comes to types of fraud.

What distinguishes mortgage fraud as a kind of fraud is that it requires motive, moving away from an error. The prosecutor is responsible for demonstrating this purpose, which can be very difficult to achieve. Even if the effect of the fraud is not what was expected (a mortgage may not be given to the applicant, for example), it is still known as fraud and charged as such.

Although mortgage fraud is fundamentally profit or housing, the possible scams within these two types of mortgage fraud are extensive and include but are not limited to:

  • Claims of occupancy by someone who is otherwise not occupying
  • Falsifying income in regards to employment
  • An elevated purchase price

For instance, mortgage elimination programs are among the most common profit fraud scams. These schemes falsely persuade homeowners that in a short amount of time they can free themselves of their mortgages and they are charged a premium for such services, often leaving homeowners in a worse financial position than they were to begin with.

Inflated sales rates fall under housing. Imagine you have a pair of purchase contracts. One of the contracts is wrong, but the market price is greater. Should you submit the fake contract to the lender to receive a better valuation value, the crime of mortgage fraud has likely been committed.

Both organizations and persons can be sued by prosecutors for mortgage fraud. In addition, federal prosecutors may also become involved should the case extend beyond state lines. Furthermore, a defendant may receive RICO charges, especially in federal cases. This is becoming increasingly common, particularly in cases of professional fraud.

After the economy's recent crash, caused in part by rampant subprime lending fraud in both South Florida and throughout the U.S., law enforcement from State and Federal offices have spared no expense in investigating mortgage fraud offenses. We have handled numerous cases where clients are alleged to have lied on loan applications. Typically the allegation includes lying/inflating one's income, fraudulent appraisals, fake proof of employment, etc. We've represented many investors, bank employees, brokers, etc. who have either been investigated and/or prosecuted for mortgage fraud.

Mortgage fraud is a highly serious crime and carries steep penalties. Also, several laws, frequently at both state and federal levels, are often involved with such crimes. There are also several different kinds of fines and punishments as a result. It is classified as a felony offense in the majority of cases but this may differ based on the amounts involved in the crime.

The general information provided above about mortgage fraud in Fort Lauderdale is meant for educational purposes only and is not a substitute for speaking directly with an attorney about the facts and circumstances of your case. Please call 954-500-0003 in Broward or 305-674-0003 in Miami to schedule a consultation with the Law Offices of Mark Eiglarsh.

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