Mortgage Fraud Attorney In Minnesota

With the post 2008 collapse of the real estate market, many people find themselves being investigated for mortgage fraud. The FBI has identified mortgage fraud as a “pervasive and growing” problem in the United States and has labeled it a “significant priority” in its 2007 Financial Crimes report. There are a number of methods by which people can commit mortgage fraud. Each mortgage fraud scheme contains some type of “material misstatement, misrepresentation or omission” relating to real estate or the mortgage used to fund it.

What does law enforcement look for to detect possible mortgage fraud

Warning signs of potential mortgage fraud include:

  • Appraisals that appear to value a property at an unrealistically high level.
  • Exclusive use of one appraiser.
  • Increased commissions to brokers and appraisers.
  • Bonuses paid (outside or at settlement) for previous services.
  • Higher than customary fees.
  • Falsifications on loan applications.
  • False supporting loan documentation.
  • Investors used to flip property prices.
  • Multiple “holding companies” used to inflate property values.

What types of real estate or mortgage activity does law enforcement investigate for potential fraud?

Mortgage fraud schemes may involve one or more of the following:

  • Property flipping: multiple sales used to generate a higher price.
  • Silent second mortgage: use of an undisclosed second mortgage to mislead the lender concerning a borrower’s down payment source.
  • Straw buyers: concealing the entity of the borrower through the use of a third person who allows the borrower to use the third person’s name and credit history.
  • Identity theft: use of an unwitting person’s identity on the loan application.
  • Inflated appraisals: where an appraiser acts in concert with the borrower to provide a misleading appraisal report inflating the property’s value.
  • Foreclosure schemes: manipulation of distressed homeowners who are anxious to save their property. These homeowners often pay upfront fees to the perpetrator who the acquires title to the property, pockets the fees paid by the homeowner, and may remortgage the property as well.
  • Equity skimming: use of false documents to obtain a mortgage based on the apparent property equity. The perpetrator will then rent the property for several months without paying the mortgage.

What should I do if I am charged with mortgage fraud or believe I am being investigated for such a crime?

Mortgage fraud is a serious charge with potentially severe consequences. It is important to discuss your rights, potential defenses and case strategies with an experienced criminal defense attorney as soon as you are indicted or if you believe you are under investigation. If regulatory or law enforcement agencies have contacted you regarding a real estate transaction, you may be a target of a mortgage fraud investigation. You should immediately consult an experienced criminal defense attorney. If you are being investigated or have been charged with mortgage fraud, Glenn P. Bruder can protect you.