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Have you unintentionally committed mortgage fraud?

Mortgage fraud is a specific variety of financial institution fraud. The Federal Bureau of Investigation (FBI) defines mortgage fraud as misstatements, misrepresentations or omissions in relation to a mortgage loan. Mortgage fraud can be committed by a borrower or a seller, but it can also be committed by a bank officer, an appraiser, a mortgage broker, an attorney, a loan originator or other industry insiders.

A borrower might commit mortgage fraud unintentionally

Sometimes a borrower may intentionally submit inaccurate information in an effort to qualify for a loan the borrower wouldn’t otherwise receive or to receive better terms on a loan. However, a borrower may commit mortgage fraud by mistake if he or she unintentionally puts inaccurate information on a mortgage application.

For example, you might have inadvertently committed mortgage fraud if you:

  • Struck a deal with the seller that was not included in the mortgage documents
  • Misstated your income
  • Intend to repay a gift you received toward your down payment

How severe are the penalties for mortgage fraud?

In Missouri, each mortgage fraud transaction counts as a separate class D felony. Each class D felony conviction could result in a prison sentence up to seven years. Mortgage fraud could also merit federal felony convictions that could result in up to 30 years in prison, among other penalties.

Because mortgage fraud convictions can result in such severe penalties, it is important that you receive a fair trial. Each situation is unique, but it is generally valuable to do everything you can to help ensure you receive the best possible outcome in court.

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