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Illinois federal criminal defense lawyerHomebuyers in the United States have had a difficult time navigating the housing market lately, due to financial constraints related to the COVID-19 pandemic and increased competition driven by low interest rates. While homeownership is a dream for many people, it can be difficult to achieve, especially at a time like now. Some people may be tempted to obtain a mortgage through underhanded means, or prey on those who are struggling, but it is important to know that mortgage fraud is a serious crime that is typically prosecuted at the federal level and that can carry significant penalties.

Understanding Types of Mortgage Fraud

According to the Federal Bureau of Investigation (FBI), mortgage fraud is a type of financial institution fraud that involves some sort of misstatement, omission, or misrepresentation on a mortgage loan application or agreement for the purposes of misleading a bank or lender. Mortgage fraud can include actions taken by borrowers to obtain a place of residence or by lenders to make money. Common types of mortgage fraud include:

  • Foreclosure rescue or loan modification schemes: In some mortgage fraud cases, the perpetrator preys on homeowners who are close to foreclosure or who are already in the foreclosure process by either offering to save their home by transferring the deed to an investor while the homeowner’s finances improve, or by offering to renegotiate loan terms for the homeowner. Instead of helping, the perpetrator pockets the money that they make off of selling the home to the investor, or by collecting fees or other costs from the homeowner for allegedly negotiating new loan terms.

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Posted by on in Fraud

Illinois defense attorney, Illinois criminal justice system, Illinois criminal lawyer,Mortgage fraud encompasses several fact patterns or situations all of which are illegal under federal law. Mortgage fraud is characterized by some type of “material misstatement, misrepresentation, or omission in relation to a mortgage loan that is then relied upon by a lending bank,” according to the FBI.

Thus, any lie that would influence a lender’s decision qualifies as mortgage fraud. The decision could relate to loan approval, reduced payoff amount or to repayment terms. Often mortgage fraud scams involve identity theft or income and asset falsification.

While the classic case of mortgage fraud is fraud perpetrated by the borrower, mortgage fraud cases have arisen in the aftermath of the housing market collapse when distressed homeowners were targeted by financial institutions. Even though the crime of mortgage fraud has evolved over time, there are several types that are seen regularly.

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Posted by on in Federal Crimes

Illinois federal crimes attorney, Illinois criminal attorney, Illinois defense lawyer,As there are more and more people looking to buy homes, and technology is always evolving, the mortgage fraud rates have increased significantly. People are buying homes with the assumption that there will be no issues that follow. However, there are far too many people who must face foreclosure because of the fraud that took place.

Mortgage Fraud in the Numbers

In the second quarter of 2017, there have been an estimated 13,404 mortgage applications estimated to have indications of fraud. Compared to the second quarter of 2016, the mortgage application fraud risk index has increased by 16.9 percent. Many people argue that the continued shift from the refinance-heavy market to a purchase market is a major factor in the increase of mortgage fraud risk. From the second quarter of 2016, there was also a 48 percent increase in loan shares originated through wholesale channels.

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Illinois federal crimes attorney, Illinois criminal attorney, Illinois defense lawyer,There are many times in a person’s life where he or she will need to repay student loans, credit card debts, and/or a mortgage. Even though some of these events, such as buying a home, can be a very exciting time in a person’s life, there are, unfortunately, several incidents where money is lost, and you are charged with fraud.

What Are Some Popular Complaints of Fraud?

Fraud is defined as unlawful deception for the person committing the act to benefit financially. The person or company committing fraud may appear highly respected and reputable. In 2016, the biggest consumer complaint included consumer debt, such as mortgage lending, abusive debt collection practices, and student loan services.

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Posted by on in Mortgage fraud

Illinois defense attorney, Illinois criminal justice system, Illinois criminal lawyer,Purchasing a home is one of the largest investments most people make within their lifetime. By entering into a mortgage with a lending company, you agree to make regularly scheduled payments for a set duration of time, typically around 30 years. The decision is a substantial one with long-lasting repercussions, which lends itself to high-stress during the application process. When stress levels rise, our brain can sometimes cease to function as clearly as we would like causing an increase in mistakes. Errors on mortgage documents are something to avoid. Otherwise, you may face federal mortgage fraud charges.

What Is Mortgage Fraud?

Mortgage fraud applies to individuals and professional brokers, alike. Deception occurs anytime a party misrepresents the facts on a mortgage application or document with the intent to obtain a mortgage that would otherwise have been obtainable had the opposing party known the truth. The deceptive practice from either side is punishable at a federal level.

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