Mortgage Fraud

Georgia Mortgage Fraud Defense Lawyer

Mortgage fraud carries serious penalties if you are convicted. At The Federal Law Group in Atlanta, Georgia, we work hard to investigate the charges against you and the evidence that the prosecution possesses. Your rights and freedom are at stake.

Mortgage fraud typically occurs in two distinct manners: fraud for profit and fraud for housing. The motive behind fraud for profit is to revolve equity, falsely inflate the value of the property, or issue loans based on fictitious properties. 

Some examples of mortgage fraud for profit include: equity skimming, property flipping, and mortgage related identity theft. Equity skimming schemes involve the use of a false corporation, corporate identity theft, and the use or threat of bankruptcy/foreclosure to con homeowners and investors. Property flipping is the purchasing properties and artificially inflating their value through false appraisals. The artificially valued properties are then repurchased several times for a higher price by "straw buyers."  After three or four fraudulent sales, the properties are foreclosed on.

Approximately 80% of property flipping occurs when a mortgage industry insider, such as an employee of a bank or mortgage company, finds and recruits a "straw buyer" (or investor) with good credit to participate in an illegal scheme disguised as a get-rich-quick investment scheme. The "straw buyer" is often an unwitting participant and is stuck with a mortgage he or she cannot afford and a property that cannot be sold for the price paid.

Mortgage fraud for housing represents illegal actions perpetrated solely by the borrower and is committed with the motive of acquiring and maintaining ownership of a house under false pretenses. This type of fraud usually occurs when a borrower makes misrepresentations regarding his income or employment history to qualify for a loan, and also implicates bank fraud.

Bank fraud plays a part in this if a higher income or false employment is reported on a mortgage application, or a fake corporation is set up to disguise bad credit. By using a fraudulent corporation and federal ID number instead of the individual’s social security number, corporate credit can be used to qualify for a mortgage when personal credit can not.  Sometimes, inflated tax returns are submitted to show a higher income, which can also result in charge of tax fraud.

The defrauding of mortgage lenders should not be compared to predatory lending practices which primarily affect borrowers. Predatory lending typically affects senior citizens and lower income borrowers. Predatory lending forces borrowers to pay exorbitant loan origination and/or settlement fees, sub-prime or higher interest rates, and in some cases, unreasonable service fees, which often result in the borrower defaulting on his/her mortgage payment and undergoing foreclosure or forced refinancing.

At The Federal Law Group, we have represented both "straw buyers" and mortgage industry insiders.  If charged in a mortgage fraud conspiracy, the role you had in the conspiracy will play a large part in the severity of the punishment. The prosecution must show that you had the intent to commit the crime as charged. Even though there may be evidence that you participated in the scheme, you may have been one of the many victims of this crime. If the government doesn't have evidence of your intent to commit a fraud, the charges can be dismissed or the sentence significantly mitigated. 

For more information on a charge of mortgage fraud, call today to schedule your free initial consultation.