White-collar crimes in the New York City metro area cover several non-violent, illegal actions in the financial domain. Misapplication of funds and embezzlement occur more often than other financial institute fraud, but mortgage fraud is still a concern for law enforcement.
Basics of mortgage fraud
The FBI defines mortgage fraud as misrepresentation or deceitfulness to secure a loan, and it often involves two parties. One party submits the information, and the other party expects that information to be true to complete transactions. Either a borrower or a lender can commit mortgage fraud.
A lender having substantial experience in securing loans does not indicate trustworthiness. The advancement of technology has made it easier to develop new schemes, and statistics show a 16.9% increase in mortgage fraud in 2017. The Fraud Enforcement Recovery Act could levy a punishment of 30 years in prison and a $1 million fine.
Common mortgage scams
A common type of borrower housing fraud involves misrepresenting income to secure a loan from the lender. It may include getting a cash gift from a family member to inflate income without disclosing the gift. This places the lender at risk of a loss from unqualified buyers.
A borrower may also commit occupancy fraud by being dishonest about home occupancy to the lender. This commonly involves the borrower using a straw buyer who qualifies for the loan and makes the transaction on the borrower’s behalf. Fraud also extends to real estate agents and loan officers who may work together to inflate home prices so that they can make a higher profit.
Some dishonest people offer foreclosure relief or debt relief. They promise the homeowner lower payments or even say they will make mortgage payments for a fee. They don’t carry out the promise, which leaves homeowners in further financial trouble.
Legal representation
State law takes bank and mortgage fraud seriously because it devastates individuals and businesses. Anyone accused of mortgage fraud may want to ask a defense lawyer about their options as soon as possible.