Mortgage fraud is not a single defined offense. It is a term used to describe a range of illegal activities punishable under California law.
Fraud itself is the intentional misrepresentation or concealment of certain facts to make another person do something that is not in their best interests. Mortgage fraud is, therefore, fraud committed in mortgage dealing, such as:
● Providing false identification
● Making false statements regarding income, debt, or assets
● Intentionally overvaluing any land or property
In California, mortgage fraud is usually prosecuted under Penal Code 487 PC, which is the state’s grand theft law.
Violations of Penal Code 487 PC (Grand Theft) are treated as wobblers. If the case is prosecuted as a misdemeanor, potential penalties are summary probation, up to 1 year in jail, and / or a fine of up to $1,000. A felony conviction is punishable by formal probation, 16 months, 2 years, or 3 years in prison, and / or a fine of up to $10,000.
Additional penalties apply when mortgage fraud is prosecuted as a felony. If the defendant defrauded the lender of more than $65,000, they could receive an additional year in prison. If there is a loss of more than $200,000, the penalty is an additional two years. Grand theft of more than $1.3 million is punishable by 3 extra years in prison and a loss of more than $3.2 million calls for an additional four years.
On top of these extra penalties, a defendant can spend an additional 1 to 5 years in prison if they were convicted of two or more related acts of mortgage fraud and the victim was defrauded of more than $100,000.
Federal statutes regarding mortgage fraud call for punishments of up to 30 years in a federal prison or a $1,000,000 fine, or both. Statutes governing this crime include wire fraud, bank fraud, mail fraud, and money laundering.
Foreclosure fraud, forged deeds, illegal property flipping, predatory lending, rent skimming, straw buyer schemes.
Anyone being charged with mortgage fraud must contact a Los Angeles criminal defense lawyer immediately. If prosecuted as a felony in a state court, they could potentially spend more than a decade in prison plus fines, and a federal conviction for any of the fraud violations could result in a 30-year prison sentence. Obtaining skilled legal counsel to protect the defendant’s interests is mandatory.
Defenses to mortgage fraud charges include lack of intent to defraud, proof that a transaction was conducted with the property owner’s consent, and mistaken identity.
In July 2013 federal and local authorities in Ventura arrested eight individuals in connection with a mortgage fraud ring that presented and filed loan applications on behalf of low-income people. The scheme generated substantial profits in terms of loan fees and commissions, and caused financial loss to banks when homes went into foreclosure.
All eight defendants were indicated by a grand jury for conspiracy to commit bank fraud and wire fraud.