Federal Mortgage Fraud Defense Lawyer
When facing allegations of mortgage fraud, it's crucial to understand that federal law does not have a specific statute making mortgage fraud a federal crime.
Instead, several laws cover situations involving defrauding or attempting to defraud a mortgage lender. This is where a federal mortgage fraud defense lawyer comes in. We are your advocate, working to protect your rights and navigate the complex legal system on your behalf.
18 U.S.C. 1341 mail fraud and 18 U.S.C. 1343 wire fraud cover fraudulent activity related to a mortgage. Additionally, 18 U.S.C. 1344 bank fraud was expanded under the Fraud Enforcement and Recovery Act of 2009 (FERA) to include FDIC-insured institutions, credit unions, federal home loan banks, and mortgage lending businesses.

Similarly, 18 U.S.C. 1014 makes it a crime to make false statements to a financial institution, such as providing false information regarding income, assets, debt, or matters of identification.
This federal statute also prohibits willfully overvaluing any land or property in a loan and credit application to influence the action of a financial institution in any way.
Depending on the complexity of the scheme, criminal investigations of alleged bank fraud by the authorities can take years to conclude.
Given the serious nature of these investigations and the potential for indictment, it is crucial to seek legal counsel from an experienced federal criminal defense attorney as soon as you become aware that you are under investigation.
The consequences of mortgage fraud can be severe, making professional legal guidance essential.
As noted, mortgage fraud can involve different charges depending on the type of conduct. When someone makes false statements regarding a mortgage application, charges might also include mail fraud, wire fraud, or bank fraud. Mortgage fraud often involves different schemes to defraud the lender, such as:
- Foreclosure and resale schemes,
- Inflated appraisal schemes,
- Air loan schemes, and
- Silent second schemes.
Individual schemes typically involve falsifying information on a borrower's application to obtain a loan or obtaining inflated appraisals for favorable loans.
What is Mortgage Fraud?
Mortgage fraud typically involves misleading a lender to approve a mortgage loan that the borrower would not otherwise qualify for. Mortgage and real estate fraud occurs when someone provides false information on a loan application to obtain a house or money or to prevent foreclosure.
Mortgage fraud is a serious federal crime that typically involves providing false information or omitting material facts to deceive lenders during the mortgage application process.
This federal crime is often prosecuted under Title 18 U.S. Code 1014, which makes any of the following acts a crime:
- Make false statements to a financial institution.
- Provide false information to a financial institution.
- Overvalue property related to a loan application submitted to a federally insured financial institution.
This federal statute covers a range of financial transactions, including mortgage applications in which borrowers might provide false information to obtain mortgage loans under false pretenses. It also addresses attempts to obtain credit and even crop insurance.
Simply put, it's a federal crime to falsely state information to a federal agency or financial institution to obtain credit or insurance.
Under 18 U.S.C. 1014, it's illegal to "knowingly make any false statement or report, or willfully overvalue any land, property, or security for the purpose of influencing in any way the action" of federally insured institutions, including:
- Banks,
- Credit unions,
- Mortgage lending institutions,
- Federal Housing Administration programs.
What Factors Must Be Proven to Convict?
To convict someone of mortgage fraud, federal prosecutors must prove several elements of the crime beyond a reasonable doubt, such as the following:
- The defendant made a false statement, submitted false information, or overvalued property. This can involve inflating the value of a property, misstating income or assets, or omitting debts.
- The defendant acted knowingly or willfully. This means they knew the information was false and intentionally submitted it to deceive the lender.
- The false information was intended to influence the decision of a federally insured financial institution.
- The false information or statement was "material," meaning it was important enough to affect the lender's decision-making process. Notably, a slight miscalculation in the borrower's income will not be considered, but a gross overstatement of their earnings to secure a loan would be material.
What are the Penalties for Mortgage Fraud?
Suppose you are convicted of violating 18 U.S.C. 1014 false statements on loan and credit applications related to mortgage fraud. In that case, you can face both criminal and financial consequences, including the following:
- Up to 30 years in federal prison,
- Fines of up to $1,000,000,
- Restitution to the victims of the fraud for their financial losses.
Federal sentencing for mortgage fraud offenses will consider different factors, such as the following:
- The amount of money involved,
- The defendant's role in the fraud, and
- Any prior criminal history.
The Federal Sentencing Guidelines provide judges with a framework for determining an appropriate sentence. However, they have the discretion to deviate from these guidelines based on the specific circumstances of the case.
What are the Defenses to Mortgage Fraud Charges?
Suppose you were accused of mortgage fraud. In that case, a federal criminal defense lawyer can use different strategies to challenge the prosecution's case.

Perhaps we can show a lack of intent. A crucial element that must be proven is that you acted "knowingly" or "willfully." Perhaps we can show that the false statements were made by mistake or without intent to deceive, which may weaken the prosecution's case.
Perhaps we can argue that you acted in good faith, believing the information you provided was true. Perhaps we can argue you relied on inaccurate information from a third party, such as an appraiser or accountant. Simply put, we might be able to argue that you did not intentionally commit fraud.
Perhaps we can argue that others involved in the transaction coerced you into providing false information. For more information, contact Cron, Israels & Stark, a Los Angeles-based California criminal defense law firm.
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