Mortgage fraud is the material falsification of facts by either a lending institution or a purchaser regarding the application for, or the approval a mortgage. Being charged for mortgage fraud on a federal level is an exceedingly serious offense. A charge of federal mortgage fraud involves the defrauding of a federally insured lending institution. An accused individual or group that has been charged or indicted, in addition to facing the monetary penalties of the tangible loss triggered by the fraud may be held responsible for the anticipated total of losses that have not yet reach fulfillment. The Fraud Enforcement & Recovery Act (FERA) was signed into law in 2009. Under this federal law, fines may be assessed up to one million dollars as well as imposition of a thirty year minimum prison term. State charges may vary in the amount of monetary penalties and jail time, but either scenario will conclude with harsh results for a conviction.
Mortgage fraud should not be confused with predatory lending. A predatory lender is defined as a financial institution which takes advantage of prospective property buyers who may be uneducated in current lending practices as well as interest rates; who are convinced by the institutions to agree to loans that the lenders recognize as not being in the best interests of the purchasers. Examples of this can be loans with fluctuating interest rates that become higher than the purchaser can afford after a certain time-frame, as well as loans that initiate with higher interest rates than the going (interest) rate at the time the loan is executed.
Below you'll find recent articles that specifically identify with the topic of mortgage fraud as well as separate articles posted on my blog: