Mortgage Fraud Defense Lawyer in Phoenix
Have you been arrested, or are you under investigation, for mortgage fraud? This is a serious crime under Arizona as well as federal law. Unlike certain crimes, the evidence and the defenses tend to involve financial issues and financial documents. At The Feldman Law Firm, we understand the financial underpinnings of a mortgage fraud charge. We also understand how best to defend against it. Call us for an assessment of your case.
What is Mortgage Fraud in Arizona?
The basic law concerning residential mortgage fraud in Arizona is contained in A.R.S. 13-2320. The elements of the offense are:
- Knowingly making or using an intentional misrepresentation or omission of a material fact during the lending process, which misrepresentation or omission is relied upon by the lender, the borrower or any other party to the process; or
- Receiving any funds that you know resulted from an intentional misrepresentation or omission; or
- Filing (or causing to be filed) with any county recorder in Arizona any loan document that the person knows to contain any material misrepresentations or omissions.
Mortgage fraud under state law is generally a class 4 felony. However, if there is a pattern of such behavior or a conspiracy alleged, it could be charged as a class 2 felony. But the statute also specifically states that if you are not aware that the information is a deliberate misstatement, omission or misrepresentation, you are not in violation of the law.
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Different Types of Mortgage Fraud
When most people think about mortgage fraud, they envision a borrower lying on a mortgage application, perhaps inflating income or assets, or omitting existing debt. But there are different variations on mortgage fraud than could involve others in the lending process. Here are the basic types of fraud, and the people who might stand accused of it:
- Fraud for Property. This is a situation where the prospective buyer/mortgagor is accused of falsifying financial information provided to a lender in order to secure mortgage financing. This could involve submitting false financial statements or pay stubs, failing to disclose existing financial obligations, and similar acts.
- Fraud for Profit. This is a type of mortgage fraud where the offense is allegedly committed by industry insiders, including mortgage brokers, appraisers, and bank officers, among others. Examples include appraisers over inflating the value of property in order to show increased equity. Another example would be equity skimming, which involves an insider getting title to a home, refinancing it, and taking out the equity, usually by renting the property out and failing to pay the mortgage debt.
- Fraud to facilitate a criminal enterprise. An example of this type of fraud is where the real estate is used to conceal money illegally obtained, a form of money laundering.
While some of these acts are covered under section 13-2320 of the Arizona Criminal Code, others may be charged under racketeering or similar statutes.
Federal Mortgage Fraud Laws
Mortgage fraud may also be charged, in many cases, under federal law. The Fraud Enforcement and Recovery Act of 2009 (FERA) significantly expanded the power of the federal government to deal with mortgage fraud and expanded the potential penalties in some cases to a fine of up to $1 million and a sentence of up to 30 years in prison. Some of the changes were:
- Extending the prohibition on false financial statements to those employed by mortgage lenders.
- Expanding the definition of a financial institution to include a private mortgage lending business.
- Expanding the federal money laundering laws to include funds illegally derived from any unlawful activity (including mortgage fraud).
FERA contains many additional provisions, some of which further affect the laws regarding mortgage fraud.
Mortgage Law Defense Attorney in Phoenix, AZ
If you have been charged with mortgage fraud under state or federal law, you are facing serious consequences if you are convicted. These types of cases require an attorney with specialized knowledge and the ability to understand and unravel financial issues.
Speak to former prosecutor Adam Feldman, a Phoenix criminal lawyer who can provide you with a straightforward assessment of your mortgage fraud case. Call for a free consultation.