Many white-collar criminal charges lead to federal prosecution. Financial crimes often cross state lines or involve the use of federal infrastructure. If money passes through the Federal Reserve or any part of a fraudulent scheme uses mail service or telecommunications, then federal prosecution is possible.
Mortgage fraud often leads to federal charges against the person accused of misrepresenting their circumstances to defraud a lender and obtain a loan for which they may not have actually been eligible. There are several groups of people who have above-average risk of facing mortgage fraud charges, with the three groups below being among the most vulnerable.
1. Mortgage brokers
Professionals helping their clients secure mortgages sometimes encourage fraudulent conduct. They might coach aspiring buyers to misrepresent their finances by reporting assets or income they do not actually have. They may overlook inaccuracies in paperwork. Getting paid on a commission basis can inspire mortgage brokers to bend the rules in some cases or ignore clear rule violations other times.
2. Real estate investors
People seeking to purchase real property as an investment might commit mortgage fraud by claiming they intend to occupy a property when the real goal is to rent it out to others for income. Other times, people flipping homes could face accusations of mortgage fraud because they misrepresent their intent or exaggerate their financial circumstances to qualify for better mortgage terms. The details on a mortgage application can prove that fraud occurred. Anyone securing multiple mortgages in close proximity to one another could be at risk of financial and legal scrutiny, especially if they eventually default.
3. Buyers who cannot qualify
Not all mortgage fraud occurs due to a desire for profit. Some people end up accused of fraud because they desperately want to become owners instead of renters. Strict rules regarding income and other eligibility standards may inspire people to misrepresent their circumstances or even lie about their income to mortgage lenders. Especially if they eventually default on the mortgage, those who lie to acquire a mortgage for housing could be vulnerable to prosecution.
Responding assertively to accusations of mortgage fraud is critical for the protection of those accused of lying to obtain a mortgage. The advocacy of a lawyer familiar with federal white-collar criminal charges can be important for those responding to pending mortgage fraud accusations accordingly.