Whether your crime is classed as a felony or misdemeanor can influence the penalty. Speaking to qualified mortgage fraud defense lawyers is the best way to fully determine what kind of sentence and/or fine you’re facing after being accused of mortgage fraud. Let’s look at some of the facts below.
Ask Mortgage Fraud Defense Lawyers: Is Mortgage Fraud a Felony or a Misdemeanor?
Whether mortgage fraud is a misdemeanor or felony in Texas varies depending on the case. The value of the mortgage is what determines what the crime is classed as. More valuable mortgages lead to greater punishments for this crime.
What If I Didn’t Commit Mortgage Fraud?
Not everyone involved in a mortgage fraud case committed mortgage fraud themselves. You may have been dragged into this by a partner, appraiser, real estate agent, or mortgage broker who broke the law. Regardless of your involvement, whether the crime is classed as a felony or misdemeanor will always be determined in the same way.
The consequences you personally face will vary depending on your involvement. If you weren’t knowing involved, then gathering evidence to prove this is key to getting out of this case without suffering consequences for somebody else’s actions. Unfortunately, this is difficult to do, so you should always work with the best attorney you can find. Find out more about mortgage fraud and contact an attorney to advise on your case.
What Exactly Is Mortgage Fraud?
Mortgage fraud occurs when an individual intentionally makes false statements to obtain a mortgage or a loan to buy a property. However, even unknowingly committing mortgage fraud is a very serious offense. Sometimes documents get mixed up or misread, and you’ll need to prove this was the case if you want to avoid being charged with mortgage fraud.
Mortgage fraud isn’t always committed by buyers. It can be committed by anybody involved in valuing, selling, and purchasing a property.
5 Examples of Mortgage Fraud
1. Straw Buyer
If somebody uses a different person’s name when trying to get a property loan, that’s a straw buyer. Usually, this is done to obtain a loan higher than the value of the property.
2. Air Loan
If somebody invents a buyer and property while trying to obtain a loan, this is known as an air loan. In reality, there’s no property to purchase, and the buyer taking out the loan is not a real person. This type of mortgage fraud is most commonly committed by a mortgage broker.
3. Appraisal Inflation
Appraisal inflation is when appraisers mislead investors by telling them a property is worth more than it is.
4. Income Fraud
The most common type of mortgage fraud committed in the United States is income fraud. This is where somebody looking to borrow money to buy a property will inflate their income to get a larger loan or, in some cases, to be awarded a loan if they don’t have a high enough income to get one.
5. Occupancy Fraud
If a borrower states they intend to rent out their property, but they don’t intend to do so at all, then this is one type of occupancy fraud.
Another kind of occupancy fraud is if a borrower states the property will be their primary residence, but in actuality, it won’t be. Stating a property will be your primary residence can sometimes get you more favorable loan terms.
What Are the Penalties for Being Involved in Mortgage Fraud?
You can be penalized for being involved in mortgage fraud even if you didn’t commit the fraud yourself and didn’t know that the fraud occurred. The two types of penalties that may be incurred are jail time and fines.
Most felony charges of mortgage fraud result in 10 to 99 years in prison. The more money that was unlawfully obtained, the longer the sentence will be. However, in some cases, usually when mortgage fraud is classed as a misdemeanor, jail time can be as little as two years. Fines can vary from around $10,000 to $1,000,000. The size of your fine varies depending on the value of your mortgage and the jail or prison time you get.
What Do You Do If You’ve Been Accused of Mortgage Fraud in Texas?
If you’ve been accused of mortgage fraud in Texas, your first step should be to get in touch with an attorney. This applies whether or not you were involved in the case at all. A top-notch attorney may be able to help you get a lesser sentence depending on the severity of your crime. They can also defend you if you were unknowingly wrapped up in someone else’s crime.
The value of the mortgage, property, or loan determines whether mortgage fraud is classed as a misdemeanor or a felony. The higher the value, the more severe the consequences. Protect yourself by working with the best mortgage fraud attorney you can find.
