Mortgage fraud is a legal term used for several different frauds, all involving mortgages or mortgage modifications. In California, a wide variety of people can face these charges, including homeowners, real estate agents, and mortgage brokers.
Unfortunately, law enforcement may bring these charges forward even if the evidence against you is slim. Fortunately, the mortgage fraud lawyers in Los Angeles at Simmrin Law Group can help you. Our criminal defense team has an emphasis on white-collar charges like mortgage fraud.
What Exactly Is Mortgage Fraud?
Mortgage fraud is any type of fraud involving a mortgage. The most common types of mortgage fraud include:
False Appraisals
When an appraiser intentionally inflates the value of a home, it’s considered mortgage fraud. This fraud can be the appraiser acting on their own, or it can be the result of a bribe from a home seller, mortgage officer, or another party. All parties involved in this intentional misappraisal can face charges.
False Loan Modification Promises
This type of fraud takes advantage of distressed homeowners. Typically, a person or company offers to help the homeowner refinance their home. The purpose may be to consolidate debt, make smaller payments, reduce the principal, or avoid foreclosure. The homeowner pays a large fee for this service, but then no relief is ever actually provided.
Even many legitimate companies have faced charges for this type of offense.
False or Misleading Mortgage Applications
Falsifying any part of a mortgage loan application, including income, debt, or identity, can count as mortgage fraud, specifically when the aim is financial gain.
This list is not exhaustive. There are dozens of different offenses for which a person or company can be charged with mortgage fraud, and your Los Angeles mortgage fraud attorney can explain them in more detail.
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Who Gets Charged With Mortgage Fraud?
Anyone involved in a false or fraudulent mortgage scheme can be charged. Often, the offender is a white-collar professional working in the real estate or financial industry. Examples of defendants can include:
- Loan officers
- Mortgage brokers
- Realtors
- Appraisers
- Escrow agents
- Homebuyers
- Homeowners/ home sellers
In many fraud cases, only a single party faces prosecution. Others involve groups of people who allegedly worked together to commit the fraud. In some cases, innocent homeowners or professionals are charged, even if they were unaware of the illegal activity.
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Under What Law Will I Be Charged With Mortgage Fraud?
The laws governing mortgage fraud in Los Angeles are varied. Unlike some states, California does not have a specific statute for mortgage fraud. Instead, you will likely face charges under a broader law like Penal Code 487, California’s “grand theft” law.
Grand theft is an all-purpose statute used for any theft of something worth $950 or more. Because the threshold for this charge is only $950, virtually any mortgage fraud counts as grand theft. The specific type of grand theft used for mortgage fraud is “theft by false pretenses,” which means using lies or misinformation to steal something (or defraud money).
However, the legal definition of grand theft is very specific. The prosecutor must prove four main facts:
- You deceived either a property owner or lender
- The deception was done knowingly and intentionally
- The reason you performed this action was to either get the property or the value of the loan
- You did, in fact, obtain possession of the property or the loan money because the victim believed your false information
If the prosecutor cannot prove even one of these facts, you should not be convicted. This makes it possible for a mortgage fraud lawyer in Los Angeles to defend even some of the toughest cases.
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How Do I Defend Against Mortgage Fraud Charges?
Several arguments can work well, depending on the case. Some of the most common defenses used by Los Angeles mortgage fraud attorneys are:
- No fraudulent intent
- Not the real perpetrator of the fraud
- Lack of evidence
No Fraudulent Intent
The definition of grand theft requires that you knowingly and intentionally supplied misinformation. In many cases, however, the defendant didn’t intend to do this at all. You may have simply made a mistake or been relying on false information that you believed was true.
Not the Real Perpetrator of the Fraud
One situation we see all the time is that the victim or a fraud, or an innocent person who was involved, ends up getting accused of wrongdoing. These misplaced accusations often happen because the true fraud artist is trying to hide their guilt by blaming someone else instead.
If someone misinformed you, and you acted on the wrong information they provided, it’s possible to make it look like you were the one who caused the fraud. Unfortunately, many perpetrators of fraud are aware of this and are able to easily set others up to take the fall.
Lack of Evidence
Real estate cases are always complex, and investigators often rely on shaky evidence or their own interpretation of documents. Remember that the court requires facts and evidence, not accusations. It is possible to challenge individual pieces of evidence and have them suppressed or challenge the entire proceeding for lack of evidence and potentially have the case dismissed.
Additionally, plea bargains can be extremely useful in mortgage fraud cases. The result can be a reduced charge, reduced penalties, and even no jail time.
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What Penalties Do I Face for Mortgage Fraud in Los Angeles?
Grand theft can be charged as a misdemeanor or a felony, depending on the circumstances. While you will face much harsher penalties for a felony charge, even a misdemeanor conviction can result in serious consequences.
Misdemeanor Grand Theft
If you are convicted on a charge of misdemeanor grand theft, you could be looking at penalties which include:
- Up to one year in jail
- Up to $1,000 in fines
- Full repayment of the defrauded amount
- Summary probation
Felony Grand Theft
As mentioned, a charge of felony grand theft can result in much greater penalties, including:
- Up to three years in prison
- Up to $10,000 in fines
- Full repayment of the defrauded amount
- Formal probation
When the amount stolen through fraud is determined to be particularly high, you could face additional sentencing enhancements. These enhancements can result in a much longer prison sentence. The guidelines for additional penalties are as follows:
- One additional year of prison time if the value of the stolen money or property was greater than $65,000
- Two additional years in prison if the value exceeded $200,000
- Three extra years in prison if the total was above $1,300,000
- Four extra years in prison if the amount of the theft was over $3,200,000
When you face the potential penalties of this nature, it is important to have an experienced legal professional by your side. A white-collar crime lawyer in Los Angeles, CA, can help you fight the charges against you. Even if they aren’t able to win your case outright, there is a strong chance that they will at least be able to get the charges greatly reduced.
Additional Counts of Grand Theft
When a person commits multiple counts of fraud, they may face stacked sentencing for each separate act. A person convicted of dozens of counts of fraud could face a decades-long prison sentence.
When a person commits several acts of fraud against the same victim, they could face multiple counts of fraud. However, their attorney may also be able to argue that the different actions were all part of a greater scheme to defraud that person for as much money as possible.
When fraud or any other grand theft is part of a single scheme against a victim, it can not be counted as separate counts. Proving whether several acts of fraud against a single individual were either isolated actions or part of a greater scheme can be quite difficult.
Since the burden of proof lies with the prosecution, the argument of a single scheme can be a strong tactic for your L.A. mortgage fraud lawyer’s defense strategy.
Talk to a Los Angeles Federal Fraud Lawyer for Free
Prosecutors hit hard on mortgage fraud cases because they see it as a way to get significant convictions and stand up to white-collar crimes. Do not become the next victim of this system. Let the Los Angeles mortgage fraud attorneys at the Simmrin Law Group give you a free consultation and help you defend yourself.
We understand the complicated real estate laws and financing rules behind the mortgage industry. And we have a proven track record of successfully defending our clients in these cases. Fill out our online contact form or give us a call and get your free consultation today.
Call or text (310) 896-2723 or complete a Free Case Evaluation form