On behalf of The Goldberg Law Firm posted in White Collar Crimes on Friday, June 15, 2018.
Mortgage fraud is one of the most complex forms of fraud, and its prevalence has only increased since the housing market crashed in 2008 - scrutinizing new transactions and investigating past ones. It's important to comprehend what mortgage fraud is and what the penalties are to avoid any issues.
As stated, mortgage fraud is extremely complex. However, it relies on two simple practices - misrepresentation and deception. According to the Federal Bureau of Investigation, mortgage fraud is misrepresenting or omitting information about a mortgage loan, which is then relied on by a lender.
The lie influences the bank's decision to accept a loan, reduce payoff amount or agree to certain repayment terms. It puts the lenders in a negative position since the bank is unintentionally perpetuating bad information.
1. Fraud for profit - industry insiders use their knowledge to commit fraud. They are not trying to secure housing. Instead, they are misusing the lending process to steal money and equity from lenders.
2. Fraud for housing - a borrower misrepresents income or asset information to acquire or maintain ownership.
State and federal laws have increased the severity of penalties for mortgage fraud due to its recent growth. However, the state of Ohio does not have one statue that covers mortgage fraud. Instead, people arrested for mortgage fraud receive several charges on the state and federal level.
Federal prosecutors look at bank fraud, money laundering, wire fraud and other statutes, while Ohio prosecutors look into various theft offenses. Federal laws tailor more towards fraud for profit instead of fraud for housing.
In Ohio, if the charges involve numerous properties and several individuals, the state can charge a RICO offense that is a felony in the second degree and carries a maximum sentence of eight years in prison. It can also come with serious fines.
A conviction with mortgage fraud can lead to trouble with future employment and housing, which is why it's important to avoid misrepresenting or deceiving lenders during the mortgage lending process.