Fraud may be a word that conjures up images of high financiers with coats over their heads trying to avoid the press and the throng of angry investors. You may not consider the overstatement on a resume or the omission on a tax return to be forms of fraud, especially since they don't seem to do any harm.
However, there are numerous misrepresentations that may seem minor but are, in fact, federal crimes. Mortgage fraud is one example, but it involves a variety of schemes and often sophisticated networks of participants.
Types of mortgage fraud
There are two reasons why people commit mortgage fraud. First, a potential homebuyer may misrepresent information on a mortgage application in order to qualify for a loan or to obtain better terms. Second, a professional in some aspect of real estate uses fraud to make a profit.
If you are under investigation for mortgage fraud, you may not be alone. Authorities may suspect you of cooperating with agents from different steps in the mortgage process. There are countless methods by which the various operators in the mortgage industry may perpetrate a fraud, including:
- Flipping: While flipping property is not a crime, it becomes fraud if you purchase property then resell it using an inflated appraisal value.
- Appraisal fraud: Another way in which an appraiser can assist in a fraud scheme is to provide an inflated value when a buyer's offer is higher than the actual value of the property.
- Second mortgage: A buyer obtains a mortgage then, without the lender's knowledge, takes out a second mortgage for the down payment on the first loan.
- Identity theft: There are several variations on this scheme, including using made up credentials or the identity of an unsuspecting person to obtain a mortgage.
- Equity fraud: Investors purchase property as residential but rent it out. They may also fail to make the mortgage payments and collect the rent as complete profit.
These are only a few of the variations of mortgage fraud. If you are facing these charges, you stand accused of intentionally providing false information or omitting critical details in order to mislead someone else in the mortgage process. You may face misdemeanor or felony charges in Ohio courts or at the federal level.
The penalties for mortgage fraud are severe because of the many, high-profile cases that have left the U.S. real estate industry struggling. To ensure your rights are protected and you have the strongest possible defense, the assistance of an experienced attorney can be an invaluable asset during this legal challenge.