There are innumerable mortgage fraud schemes. Below are some that are common in California in relation to the foreclosure crisis.
Bait & Switch
In a bait and switch, an individual presents a homeowner with blank documents for signature, claiming that they will help the homeowner secure a lower mortgage payment. The individual and assures the homeowner he or she can fill in the other portions of the documents later. Meanwhile, the homeowner is signing his or her property away.
Phantom Help Scams
In phantom help schemes, an individual asks for a fee in order to help a homeowner prevent a pending foreclosure. By the time the owner realizes that this individual has not in fact helped, it is too late to stop the pending foreclosure.
Straw Buyers Schemes
A “straw” buyer is someone with good credit who buys a property for someone else. One of the ways this can become mortgage fraud is when straw buyers’ names and information are used to falsify the documents in support of loan applications. The proceeds are put into the account of the individual committing the fraud.
Individuals may assume the identity of a particular property’s owner and forge names on grant and trust deeds. That person then gets loan proceeds, stealing equity out of the property.
Illegal Property “Flipping”
Illegal property flipping happens when a fraudulent appraisal is obtained that inaccurately inflates the value of the property. A buyer unwittingly purchases the flipped property, and owes more on the property than its true value.
Penalties for Mortgage Fraud
In the four-year period of 2007-2011, the FBI increased the number of agents in the nation who investigate mortgage fraud cases from 120 special agents to 325 special agents. In June 2010, the Department of Justice announced a mortgage fraud takedown that they called “Operation Stolen Dreams.” This operation targeted mortgage fraud throughout the nation. It was the largest collective enforcement effort against mortgage fraud in history.
Through 2011, FBI investigations resulted in 1,223 informations and indictments, and 1,082 convictions of individuals charged with mortgage fraud offenses. In response to its national status as an area with increased mortgage fraud, the California’s state government is also cracking down on these offenses.
If you are being investigated or charged with mortgage fraud either on the state or federal level, you should be aware that it is now handled as a serious offense. Sometimes it is prosecuted as a misdemeanor, but it is more often charged as a felony. The President signed into law the Fraud Enforcement and Recovery Act in 2009, which increases penalties and extends the statute of limitations for mortgage fraud. Penalties for federal mortgage fraud include up to 30 years in prison or a $1,000,000 fine, or both. The statute of limitations was increased to ten, rather than five years. Individuals may face more than one mortgage fraud charge, resulting in a very long prison term.
Choose a knowledgeable San Francisco federal mortgage fraud attorney to represent you in these proceedings. The experienced federal criminal defense attorneys at Dudek & Cintean can help you fight an inquiry by the FBI or charges brought by the United States. Call us at (415) 946-4020 for a consultation.
Call us at (415) 946-4020 for a consultation.
Alin Cintean, Attorney at Law and Richard Dudek, Attorney at Law
201 Spear St #1100
San Francisco, CA 94105
Phone: (415) 946-4020
Map and Driving Directions