Milwaukee Mortgage and Real Estate Fraud Lawyers
Mortgage and real estate fraud is an increasingly common problem in American society. Due to our changing economy and the state of the housing market, some people are taking advantage of the unsettled real estate industry for personal financial gain. Evidence of this crime can result in a fraud charge.
If you have been accused of this crime, contact the Milwaukee mortgage and real estate fraud defense attorneys of Hart Powell, S.C., to learn more about your rights. Our compassionate and dedicated lawyers will work closely with you and work tirelessly to fight a sentence you do not deserve. Contact us today at (414) 271-9595 for a free consultation.
Why Hire a Mortgage Fraud Defense Attorney?
Mortgage fraud covers a wide range of possible offenses, and an effective defense requires knowledge of the real estate industry laws and statutes as well as state and federal laws concerning mortgage fraud. Even industry insiders may not be familiar with the laws and regulations concerning mortgage fraud, which vary by state. Having an experienced attorney to take on your case and help you create a strong defense to the charges against you can significantly increase your chance of a successful outcome.
Why Choose Hart Powell, S.C.?
For almost 30 years, the dedicated team at Hart Powell, S.C. has been aggressively defending our clients against federal and state criminal charges of all kinds. We apply all of their experience and knowledge to each case and carefully craft a comprehensive legal defense backed by decades of courtroom experience. Hart Powell, S.C. will take the time to get to know you and the details of your case, provide sound legal advice, and work tirelessly to keep an arrest or criminal charge from defining your life. When you choose us for your criminal defense attorneys, you know you’re in good hands.
What is Mortgage Fraud?
Mortgage fraud refers to a large number of crimes relating to falsifying information on a mortgage application or contract. The FBI defines mortgage fraud as “any misstatement, misrepresentation, or omission in relation to a mortgage loan which is then relied upon by a lender.” Mortgage fraud is a federal offense and can carry significant jail time and fines, up to 30 years and $1 million in some cases.
There are two main types of mortgage fraud: fraud for profit and fraud for housing. Fraud for profit is when a real estate professional, such as an appraiser, inspector, or real estate agent, falsifies information regarding a property for sale for their own personal gain. Fraud for housing occurs when a buyer knowingly falsifies information on a mortgage loan application for the purpose of obtaining a loan.
Growth of Mortgage Fraud
Mortgage fraud has been growing steadily in America over the past decade. According to a 2019 report from CoreLogic, one in every 100 or so mortgage loan applications had indications of fraud. The group of buyers with the highest risk of fraud is out-of-state investors buying investment properties. This specific group has a fraud rate over 140% higher than the baseline mortgage fraud rate.
There are several different reasons for the growth of mortgage fraud, including the following:
- Increase in homeownership. With interest rates low and investor confidence high, more people are buying homes, especially in the last five years. It’s a seller’s market for homes, which can lead to more fraudulent loan applications.
- Increase in interest rates. Interest rates are starting to climb again, and this makes it harder for sellers to find qualified buyers and for buyers to get the rates they want. With limited time to make a deal, both parties may try to cut corners.
- Increase in home values. Home prices are at an all-time high over many parts of the country, and with multiple buyers vying for the same property, they may try to misrepresent their actual cash on hand to get an edge over their competitors when buying a home.
- Seller greed. With the market in such a state of flux and home prices sitting higher than normal, sellers may try to take advantage of the situation and artificially inflate the value of the home they’re selling if they know a buyer will pay it.
Mortgage and Real Estate Fraud Offenses
Allegations of unrightfully taking money or property that results in personal gain may lead to a mortgage or real estate fraud charge. In the mortgage and real estate industry, fraudulent actions may consist of:
- Taking kick-backs. This refers to any industry professional taking a payment for providing false information about a property for sale to increase the value or likelihood of a sale.
- Equity skimming. This type of fraud refers to an investor purchasing a property already in or nearing foreclosure, getting a new loan based on the equity, and then absconding with the money.
- Inflating the value of property. This is when a property’s value is artificially increased, with the added sum going to a mortgage broker or real estate professional.
- False appraisals for mortgages. This is a type of kick-back where an appraiser falsifies an appraisal to increase the value of a property for sale.
- Foreclosure fraud. This is when an investor offers to buy a property facing foreclosure, then either strips the equity out of the property with a new loan, tries to defraud the occupants by acting as a renegotiation agent, or engages in one of several other fraud schemes.
- Loan fraud. This relates to any number of possible mortgage loan schemes, from straw buyers to fraudulent property flipping.
If you have been charged with committing an act of fraud, it is important to start building your defense case immediately. You may be facing costly fines, jail time, and damage to your personal and professional reputation.
Charges for Mortgage Fraud
The federal government has no specific charge for mortgage fraud, and as such, prosecutes mortgage fraud through other types of fraud. The Fraud Enforcement and Recovery Act of 2009 enhances the enforcement of mortgage fraud and securities fraud and increases the oversight of financial institutions and real estate companies to try to prevent buyers and sellers of real estate from committing fraud.
The Act was created in response to the predatory lending practices that caused the 2008 financial crisis and allows mortgage fraud to be prosecuted under the following statutes:
- Bank fraud
- Wire fraud
- Mail fraud
- Money Laundering
Each of these statutes carries significant penalties, including fines and jail time ranging from 10 to 30 years. These criminal penalties do not include civil liability, which can include monetary damages owed to the lender from losses due to fraud.
Defending Against a Charge of Mortgage Fraud
Building a successful defense against federal charges of fraud is not easy. You must be able to prove beyond a reasonable doubt that your actions did not constitute fraud. Some possible defenses against a charge of mortgage fraud include the following:
- You acted in good faith. Your actions were not intended to break the law, and if you committed fraud, you had no knowledge of it or intention to do so.
- True and accurate statements. The information you provided on a loan application is true and correct.
- Unknowing participant. Though fraud may have occurred, you had no knowledge of it.
- Insufficient evidence. The prosecution cannot prove beyond a reasonable doubt that you committed fraud,
Which defense you should use depends on the circumstances of your particular case. You need a knowledgeable attorney who will stand up for your rights and build a strong defense on your behalf.
The Milwaukee fraud defense attorneys of Hart Powell, S.C. are ready to help those who have been charged with these serious offenses. Contact us today at (414) 271-9595 for a free case evaluation and to begin putting our legal experience to work for you.
Written by Michael Hart & Craig PowellLast Updated : May 2, 2023