Mortgage fraud is a legal term for a variety of different frauds all involving mortgages or mortgage modifications. In California, a wide variety of people can face these charges, including homeowners, real estate agents, mortgage brokers and more. Unfortunately, law enforcement may bring these charges forward even if the evidence against you is slim—but you are innocent until proven guilty. You need to speak to a Los Angeles mortgage fraud lawyer.
The Simmrin Law Group can help you. We have assembled a team of some of the best criminal defense lawyers in the state, with an emphasis on white collar charges like mortgage fraud. We understand the complicated real estate laws and financing rules behind the mortgage industry, and we have a track record of successfully defending our clients. Let us give you a free consultation to help you understand the best defenses in your case. Fill out the form to the right or call us at 310-997-4688 and get your free consultation today.
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 can be the appraiser acting on their own or it can be the result of a bribe from a home seller, mortgage officer or other party. All parties involved in this intentional mis-appraisal 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 in order 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. Legitimate companies can and do also face charges!
- False or misleading mortgage applications. Falsifying any part of a mortgage loan application, including income, debt, or identity, can count as mortgage fraud—particularly when the aim is financial gain.
This is not an exhaustive list. There are dozens of different ways that someone can be charged with mortgage fraud.
Who can be charged with mortgage fraud?
Anyone involved in a false or fraudulent mortgage scheme can be charged. Often, this 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
- Home buyers
- Homeowners/home sellers
Some fraud cases will prosecute just one person. Others involve groups of people who allegedly worked together to perpetrate the fraud. In some cases, innocent homeowners or professionals are charged even if they were unaware of the fraud.
What law will I be charged under?
It depends on what happened. Unlike some states, California does not have a specific statute for mortgage fraud. Instead, you may be charged with 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 is only $950, virtually any mortgage fraud counts. The specific type of grand theft used for mortgage fraud is “theft by false pretenses,” which basically means using lies or misinformation to steal something (or defraud money).
However, the legal definition of grand theft is very specific. The prosecutor has to prove four main facts:
- You deceived either a property owner or lender,
- You did so knowingly and intentionally,
- The reason you did this was to either get the property or the value of the loan, and
- You did in fact get 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 to defend even some of the toughest mortgage fraud cases.
How do I defend against mortgage fraud charges?
There are several defenses that can work well, depending on the case:
- 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 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. This often happens because the true fraud artist is trying to cover up their guilt by blaming you instead. If they misinformed you, and you acted on the wrong information they gave you, it’s possible to make it look like you were really the one who caused the fraud—and many criminals know this.
- 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.
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 circumstanced. The penalties include:
- Misdemeanor grand theft: Up to 1 year in jail and $1,000 in fines (in addition to repaying the defrauded amount)
- Felony grand theft: 16 months, 2 years or 3 years in jail, and a fine of up to $10,000 (in addition to repayment)
You can also receive substantial extra penalties—including up to 5 extra years in jail or more—depending on how much money you allegedly defrauded.
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 large convictions and stand up to “white collar crime.” Do not become the next victim of this system. Let the attorneys of the Simmrin Law Group give you a FREE consultation and help you defend yourself. Fill out the form to the right or call us at 310-997-4688 and get your free consultation today.
