New York City Mortgage Fraud criminal defense attorneys of Joseph Potashnik and Associates PC represent clients throughout New York City and Long Island who are investigated for, or charged with, mortgage fraud.

Mortgage fraud occurs when there is some type of material misstatement, misrepresentation, or omission contained in a mortgage loan application. For the mortgage fraud to materialize, this misstatement, etc. must be submitted to and relied on by an underwriter or lender in their decision making to fund, purchase or insure a loan. Mortgage fraud may be investigated and prosecuted on state and federal level. At the Federal level, the Financial Institution Fraud Unit of the FBI is responsible for investigating mortgage fraud. According to the FBI, two areas of mortgage fraud are subject to special targeting:

  • Fraud for profit
  • Fraud for housing.

Fraud for profit involves revolving equity, falsely inflating the value of the property, or issuing loans based on fictitious properties. Most such schemes are perpetrated by the mortgage industry insiders. Fraud for profit is the most targeted type of mortgage fraud. Our New York City mortgage fraud lawyers have represented many mortgage industry clients in mortgage fraud related cases.

VARIOUS TYPES OF MORTGAGE FRAUD

Mortgage fraud takes various forms and mortgage fraud cases are often complex. Criminal defense of a mortgage fraud case requires understanding of the way the scheme operates. Our New York City mortgage fraud attorneys have all necessary expertise and resources to successfully represent clients charged with any type of mortgage fraud, no matter how complex the case is. In technical terms, many mortgage fraud schemes include equity skimming, property flipping, and identity theft.

An equity skimming scheme involves taking title to a property subject to an existing mortgage that is in default. The buyer makes the seller believe that the purchase is real; the seller’s equity interest or other value in real property is converted to the buyer who then fails to make payments, diverts the equity, and leaves the seller with a loss.

Under the property flipping scheme, a real property’s value is artificially inflated by a co-conspirator appraiser. The flipper then obtains a mortgage to purchase the property at the inflated price. This may repeat several times. After several repurchases, the flipper receives a substantial amount of money from the lender to purchase the property, then defaults and the property is foreclosed by the lender which then learns that the property’s real value is substantially lower than the amount of the loan.

Fraud for housing is perpetrated by borrowers in order to buy and maintain ownership of a house under false pretenses. A common example of this type of fraud is a potential borrower who misrepresents his income or employment history in order to qualify for a loan.

Another common type of mortgage fraud is Silent Second. Under this scheme, the buyer borrows the down payment from the seller by taking out a non-disclosed and non-recorded second mortgage while the primary lender is led to believe that the borrower invests his own money in the down payment. This scheme is a fraud because the primary lender provides funding on the assumption that in case of depreciation there will be equity of the amount of the down payment, which will serve to protect the loan. There could, however, be much less or no equity at all should depreciation occur.

Under the Nominee Loans/Straw Buyers mortgage fraud scheme the borrower is using someone else’s name and credit history to apply for mortgage.

Sometimes a fictitious or stolen identity may be used on the mortgage application. On the state level, mortgage fraud in New York may be prosecuted under a variety of statutes including falsifying business records, forgery, fraud involving a security interest, fraudulent disposition of mortgaged property, bribery, fraud involving residential properties, larceny, etc.

If you are subject to an investigation related to mortgage fraud, contact our experienced New York City mortgage fraud criminal defense lawyers to discuss your case. The earlier you contact an attorney the better chances your defense case has.

Here are some of our mortgage fraud recent representative cases:

  • Successfully represented a mortgage broker accused of participating in a massive straw buyer and flipping real estate scheme, securing a sentence of probation
  • Defended a client indicted for recruiting straw buyers in a massive $100 million real estate flipping scheme. The client was facing 6 years in prison but was sentenced to 2 years.

 

Mortgage and real estate fraud is prosecuted on federal and state levels. Regardless of which agency is conducting an investigation, you must always speak with an experienced defense attorney before discussing your case with the investigators. If you believe that you may need the services of an experienced NYC criminal lawyer, call us today at (212) 577 6677 to set up an immediate consultation.