Mortgage Loan Modification Fraud Report Released

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Housing Opportunities Made Equal of Virginia, Inc., with the National Fair Housing Alliance recently released a report entitled "Have I Got a Deal For You!" documenting the ways in which homeowners facing foreclosure have taken advantage of by companies offering loan modifications that do not live up to their promises.

The report was the result of a year-long investigation that identified tactics used by companies advertising services on the internet and targeting homeowners at risk through direct mail, email and telephone.

This report is one more example of the scrutiny all aspects of the mortgage lending industry have faced since the mortgage crises began.

Mortgage Fraud in Florida

In Florida, the statute outlining the crime of mortgage fraud is broadly worded, encompassing virtually every aspect of the mortgage origination and modification process.

The main section states: A person commits the offense of mortgage fraud if, with the intent to defraud, the person knowingly

  • Makes any material misstatement, misrepresentation, or omission during the mortgage lending process with the intention that the misstatement, misrepresentation, or omission will be relied on by a mortgage lender, borrower, or any other person or entity involved in the mortgage lending process; however, omissions on a loan application regarding employment, income, or assets for a loan which does not require this information are not considered a material omission for purposes of this subsection.
  • Uses or facilitates the use of any material misstatement, misrepresentation, or omission during the mortgage lending process with the intention that the material misstatement, misrepresentation, or omission will be relied on by a mortgage lender, borrower, or any other person or entity involved in the mortgage lending process; however, omissions on a loan application regarding employment, income, or assets for a loan which does not require this information are not considered a material omission for purposes of this subsection.

What are the penalties?

Mortgage fraud can be charged as either a felony of the second or third degree depending on the amount of money involved with the loan:

  • A second degree felony can carry up to a 15 year prison term and up to a $10,000 fine
  • A third degree felony carries up to a 5-year prison term and a $5,000 fine.

A second-degree felony charge is triggered by loan amounts as low as $100,000, which includes much of the loans issued in the last 10 years, meaning the majority of cases charged can carry substantial penalties.

An Attorney Can Help

If you are facing an investigation or been charged with mortgage fraud, you want to speak with an experienced criminal defense attorney, as these are complex and serious charges.

Speak with a knowledgeable attorney, who can review the charges and your facts to help develop a viable defense to mortgage fraud charges.