Types of Mortgage Fraud

Texas Mortgage Fraud Defense Attorneys

With the collapse of the housing market and the government’s increased scrutiny of the mortgage industry, it is not surprising prosecutions for mortgage fraud have increased. Lawyers who represent clients in this area of practice need to have a complete grasp of the subtle and sophisticated complexities of a mortgage fraud case.

The federal criminal defense team of Stan Schneider and Ned Barnett has the experience to represent you against real estate or mortgage fraud charges. Together, we have more than 50 years of criminal defense experience. Our experience means we understand the variety of types of mortgage fraud cases and the defenses they require.

Difference between fraud for property, fraud for profit and fraud for criminal enterprise:

Fraud for property occurs when an applicant misrepresents him or herself in order to obtain property that they would not otherwise have been able to purchase. It can be charged in cases where the applicant either does or does not intend to repay the loan. The misrepresentation can be in the form of lying about one’s income or employment history to qualify for a loan.

Mortgage fraud that occurs for profit may involve multiple loans and schemes to gain illicit proceeds from property sales. This type of fraud often involves an “insider” to the mortgage industry that can falsely inflate the value of a property or issue loans based on properties that do not exist.

Some criminals may also use mortgage fraud as a front for their criminal activities such a drug trade. This type of mortgage fraud is usually charged in combination with a white collar crime such as money laundering or identity theft.

Both fraud for criminal enterprise and fraud for profit can employ several different types of schemes including:

• Property flipping: buying a house and having it appraised for much more than it is worth before selling or making false claims about improvements done to the house. This scheme usually requires an industry insider that is aware of the inflation.
• Straw Buyers: buying a house using the name and credit history of someone else. This type of fraud is typically used to purchase a house for somebody that would not otherwise qualify for a home loan.
• Appraisal Fraud: commonly linked to flipping a house, this charge is held against a dishonest appraiser.
• Foreclosure schemes: typically aimed at homeowners facing foreclosure, these individuals contact homeowners, and ask for money in exchange for aiding them with their debt through loan refinancing. Sometimes, the individuals flee with the money, sometimes they mislead the homeowner into selling them their home and are then evicted.
• Occupancy fraud: where an investor will lie about using the property as a primary place of residence in order to obtain better terms for their mortgage.

If you are facing criminal charges regarding mortgage or real estate fraud, please contact Stan Schneider and Ned Barnett in Houston today for a confidential consultation with a skilled fraud defense lawyer.