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What is the legal definition of mortgage fraud?

May 18, 2020 | Fraud

If you have been accused of mortgage fraud, you may be feeling concerned about the nature of these accusations. Mortgage fraud is a broad term that refers to many different types of illegal actions that involve misrepresentation or misstatements on mortgage documents.

You may have been accused of mortgage fraud simply due to an honest mistake — perhaps you unknowingly gave false information to your lender. If this is the case, you will need to give sufficient evidence to show that you did not have the intent of misrepresenting information. If you are not able to show this, you may face legal consequences even if you believe that you are innocent. This is why it is so important to understand how the law applies to mortgage fraud and that you take action as soon as you can to defend yourself.

Understanding the Fraud Enforcement and Recovery Act (FERA)

FERA is a federal law that prosecutes mortgage-related types of fraud. If a person is found guilty of a crime under FERA, they may be subject to a fine of up to $1 million and even up to 30 years in prison.

There are two main types of mortgage fraud recognized under FERA. The first is referred to as fraud for housing. This includes the submission of false information, for example, incorrect income statements so that a person can qualify for a mortgage that they would not have access to under normal conditions. The second type of mortgage fraud is referred to as fraud for profit. This is a situation in which a real estate professional acts in a fraudulent manner so that they can gain additional funds from a transaction.

How is it possible to successfully defend against an accusation of mortgage fraud?

For a person to be found guilty of fraud, it must be shown that they had the intent to commit the crime. In other words, they should have acted intentionally to mislead or misrepresent information. If you can show that the false information that you provided was an honest mistake, you may be able to have all charges dismissed.

Never underestimate the seriousness of any fraud accusation. If you are worried about being accused of mortgage fraud, you should take swift action to understand the law and form a strategic defense.


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