Was Your Loan Fraudulently Approved?

Mortgage fraud occurs when there is a material misstatement, misrepresentation or an omission relating to real estate loans that a lender or mortgage underwriter relies on in their decision to grant a borrower a loan, purchase a loan or insure a loan.

Examples of Mortgage Fraud

• Inflated Appraisals
• Over Stated Buyer income / Misrepresentations of assets
• Kickbacks to buyers, investors, loan brokers, appraisers, title companies
• Doctored loan documents
• Identity theft
• Ninja loans made to borrowers who have no income, no job and no assets
• Flipping a property with an inflated appraisal and reselling it quickly to an unsuspecting borrower
• Using a straw buyer to purchase a property, quitclaiming it to an investor who rents it out and then doesn’t pay the mortgage payment
• Hiding the true identity of the borrower from the lender
• A homeowner is tricked into signing the deed to their home to a third party who takes all the equity out
• A buyer gets a second mortgage from the seller and does not record or disclose this to the first lien lender

Creative Financing and Risky Mortgage Products

Mortgage brokers committed fraud competing among themsleves through the creative financing and risky loan products lenders made available. Sub-prime loans were a form of creative financing offered to high risk borrowers who ended up defaulting resulting in record numbers of foreclosures. In addition to the high level of risk, loose internal regulations made it easily possible for Brokers, Real Estate Agents, and Loan Officers to commit loan fraud through the application and approval process.

Responsibility of Causing Foreclosures

Foreclosure occurs frequently with mortgage fraud because the borrower has a higher risk of defaulting. Fraud on a bridge loan may result in a bridge loan foreclosure. Even when there is no fraud, making two mortgage payments plus interest on a bridge loan can result in a bridge loan foreclosure. Ninja loans also create a potential for more borrowers to default.

Getting Legal Help for Mortgage Fraud

The consequences for committing mortgage fraud involve criminal penalties ranging from one to ten years in jail plus paying several hundred thousand dollars in criminal and civil fines depending on the nature and amount of the fraud.

Victims of mortgage fraud may be able to get another legitimate loan that meets their financial abilities to repay and have all the fees they paid returned to them. If you are involved in mortgage fraud or are a victim, you should consult with an attorney who can advise you of your legal rights and remedies.