Mortgage Fraud Defense Lawyer
in Fort Myers
Joffe Law: Federal criminal attorneys on & by your side
Florida ranks among the top 10 areas in the country that report the most cases of mortgage fraud. There are several different types of mortgage fraud, which can make it difficult for lenders to readily detect criminal activity. The actors in a mortgage fraud scheme are not always apparent. Therefore, innocent people may sometimes be mistakenly accused of engaging in illegal activity. Fort Myers mortgage fraud defense lawyers are available to represent individuals who have been accused of mortgage fraud in Florida.
Mortgage fraud categories
Any intentional misrepresentation of information that is used to fund, insure, or obtain approval for a mortgage is generally considered mortgage fraud. Nevertheless, mortgage fraud is broadly divided into two categories: fraud for profit and fraud for housing. The FBI prioritizes fraud for profit schemes in its investigations, making it imperative that you contact a federal defense attorney in Fort Myers immediately after you’re charged.
Fraud for profit
Fraud for profit occurs when someone who works in the mortgage industry uses his or her specialized knowledge or authority to directly engage in or facilitate fraud. A significant percentage of mortgage fraud is perpetrated by appraisers, mortgage brokers, bank officers, attorneys, loan originators, and other industry professionals. The goal of fraud for profit schemes is to misuse the lending process to steal money and equity.
Fraud for housing
Homeowners engage in fraud for housing in the interest of obtaining or maintaining ownership of a property. Fraudulent applications typically obtain false information regarding the applicant’s income or assets. In other cases, the applicant may entice an appraiser to manipulate the appraised value of a property.
In some cases, a mortgage applicant may lie about whether he or she will occupy the property to obtain a more favorable response from a potential lender. Banks generally give applicants lower loan rates when they know a house will be occupied by the applicant. Sometimes an applicant may engage in reverse occupancy fraud. Reverse occupancy fraud occurs when an applicant intends to purchase a property for investment purposes, and the applicant uses future rental income from the property to qualify for the mortgage. Occupancy fraud is more common among people who flip houses and investors who use properties for Airbnb.
Do not say anything that might incriminate you. Speak with an attorney first.
Use of a straw buyer
Fraudsters sometimes use a straw buyer, a person who acts on behalf of the actual purchaser of a property with the intent to defraud and misrepresent the nature of the transaction. Once the straw buyer closes on the sale, he or she transfers the property to the actual buyer. Reasons purchasers use straw buyers may include:
- bad credit
- the actual purchaser is legally barred from making the transaction
- buyer is unable to get financing
- money laundering
Straw buyers are sometimes unknowing participants in a fraud ring. Members of the crime ring may ask someone to complete the transaction as a favor without disclosing the illegality to the straw buyer. Proof of mortgage fraud under Florida law requires an element of intent. If you or someone you know may have unknowingly become involved in a mortgage fraud scheme, contact a Fort Myers mortgage fraud defense lawyer to learn how you can protect yourself against criminal charges.
Builders sometimes engage in mortgage fraud by using straw buyers. If a builder’s project has not sold enough units to pay off debt accumulated under the builder’s current financing, the builder will conduct schemes to attract new buyers to secure additional financing. In a builder bailout scheme, the builder finds buyers to take out mortgage loans on their properties. The additional home purchases enable the builder to secure additional financing. The straw buyer may allow the purchased home to go into foreclosure after the builder secures the additional financing.
Builders may also offer substantial incentives to potential buyers without disclosing the incentives to the builder’s lender. Incentives often include:
- no money down purchases
- down payment assistance
- closing cost assistance
Illegal property flip
Flipping property is not inherently illegal. However, it is illegal to purchase a property below market value and immediately resell the home at an artificially inflated value. Illegal property flippers typically work with appraisers who assist with the scheme by fraudulently inflating the property value. In these schemes, the property flipper may also act as a straw buyer. Mortgage officers typically detect red flags if a property sold for a very low price in foreclosure and has a suspiciously inflated appraisal value.
Non-arm’s length transactions
A non-arm’s length transaction occurs when the parties on both sides of the mortgage loan transaction have a personal relationship. Such a close relationship makes the lender and the borrower more susceptible to manipulation. A sign that indicates a non-arm’s length transaction may be fraudulent is the absence of licensed professionals like lawyers and real estate agents.
Some buyers misstate their income in the interest of obtaining approval for a mortgage. Income fraud can take the form of false stated income, which involves inflating the amount of income an applicant receives. Misrepresentation of employment is another form of income fraud. Banks consider the consistency of an applicant’s income. Therefore, an applicant may be motivated to misrepresent the permanency of his or her employment or list fictitious employment. As evidence of the falsely-stated income, the applicant may provide fake pay stubs and or a falsified letter from the fictitious employer.
Mortgage fraud defense lawyer in Fort Myers
Sometimes innocent bystanders become involved in elaborate mortgage schemes. Without adequate legal representation, people who had no intent to play a part in an elaborate white-collar crime may find themselves facing time in jail or prison in addition to being required to pay a fine. Individuals who are under investigation or who have been charged with mortgage fraud in Fort Myers should immediately contact a Florida criminal defense lawyer.
Our Fort Myers mortgage fraud defense attorney is available to provide the legal counsel and representation you need. We will fight on your behalf to obtain the most favorable outcome for you. Contact us today to receive a free, confidential case evaluation.