White-collar crimes in Michigan commonly involve a group of non-violent financial crimes that happen in the business sector. The offender commits these crimes for personal gain by deceptive means. An example of a white-collar crime includes mortgage fraud, which has become a bigger problem since 2017.
Basics of mortgage fraud
The FBI defines mortgage fraud as a misrepresentation, omission or misstatement related to mortgages, and it sub-divides into fraud for profit and fraud for housing. The FBI, along with other investigating agencies, expanded the definition because of the 2008 housing crisis.
Besides greed, common reasons for the growth in mortgage fraud include the increased demand for houses, higher interest rates and higher home values. Mortgage lenders are also not as heavily regulated as other financial services such as wealth portfolio management. Many consumers think that because a lender is experienced that it means they’re trustworthy, but consumers can also commit mortgage fraud.
Types of mortgage fraud
A straw buyer buys the property for another person because they have poor credit or are prohibited from applying for other reasons. In some cases, the straw buyer falsifies income and assets for the real buyer. Another type of borrower fraud is occupancy fraud, which involves the buyers lying about occupancy. They usually do this to get lower rates on owner-occupied residences.
A team of professionals may devise an air loan scheme, which creates a non-existent buyer and property. They may create false documents, fake mailboxes and even fake banks to verify the “borrower’s” income, address and occupation.
Foreclosure scams prey on homeowners who are at risk of foreclosure and insist they can help them if they transfer the deed to an investor. The scammer promises that the owner can buy back the lease after renting for several months, but the scammer often fails to make payments. The scammer may also cash out all the remaining equity in the home, evict tenants and sell the home or let the lender foreclose.
White-collar crimes often come with jail terms and stiff fines of up to $1 million. A person charged with mortgage fraud needs a good legal defense team to fight the charges.