Most people who purchase a home in this country will use a mortgage to do so. This is a tightly regulated industry, partially because it deals with high-value property and considerable risks to lenders. It’s also an industry that’s sometimes affected by fraud.
Mortgage fraud is a type of white collar crime that can occur on either side of the homebuying process. It typically falls into one of two broad categories: fraud for housing and fraud for profit.
Fraud for housing
Fraud for housing usually involves an individual misrepresenting information to qualify for a mortgage. This can include overstating income, falsifying employment details or misreporting the intent to live in a home as a primary residence to get a better rate. People accused of this type of fraud may claim they were just trying to secure a home, not commit a crime.
Fraud for profit
Fraud for profit tends to involve real estate professionals, investors or insiders who manipulate the system for financial gain. Examples include inflated appraisals, kickbacks, straw buyers and schemes to defraud lenders out of money. These cases are often more complex and carry steeper penalties if a conviction occurs.
Individuals who are accused of mortgage fraud should remember that these cases often come with considerable evidence due to a lengthy paper trail. Because this is a serious crime, the defendant may be facing considerable penalties. Working with someone familiar with these matters may be beneficial since that person can help the defendant to learn their options and set a defense strategy that they’re comfortable with.