FHA Fraud Explained by a New York City Criminal Attorney
The Federal Housing Administration guarantees loans made by select mortgage lenders throughout the United States. Lenders approved by the FHA can obtain mortgage insurance to protect against defaults for loans issued for single family homes, multi-family homes, manufactured homes, and hospitals. According to the Department of Housing and Urban Development, the FHA is the “ largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.”
Because the FHA insures mortgage, the Administration faces the potential for financial loss in the event of a default. As a result, FHA loan fraud is taken very seriously. Defendants accused of involvement with any schemes to submit fraudulent information for purposes of securing FHA loans can face criminal and civil penalties. FHA fraud can be perpetrated by individuals who complete loan applications with false pretenses, or by financial lenders and other institutions who facilitate fraudulent applications or who falsely certify that mortgage applicants meet FHA criteria.
If you or your organization has been accused of involvement in FHA mortgage fraud, it is imperative you seek prompt legal guidance from a lawyer who understands the state and federal laws that could apply to prosecute you. Bukh Law Firm, PLLC provides legal representation when defendants are accused of fraudulent acts. Give us a call so we can fight to help you avoid penalties or reduce potential consequences associated with accusations of fraud.
FHA fraud involves any attempt to make false or misleading statements to the Federal Housing Administration (FHA). Material misstatements and material omissions can result in allegations of fraud. The submission and/or certification of inaccurate documentation can also lead to criminal charges. Falsifying income, lying about whether the home is a primary residence, and falsifying employment records are a few of many different examples of behaviors which could be classified as FHA fraud.
Individuals applying for an FHA loan can be guilty of fraud, as can mortgage brokers who encourage applicants to lie and financial institutions that falsely certify that information on mortgage loan applications is correct. While knowledge is typically required to prove fraud, there are cases where defendants can be charged if fraud occurs and they were grossly negligent in determining the veracity of statements made on mortgage loan applications.
Mortgage fraud is illegal. Both federal laws and New York State laws impose serious criminal penalties for mortgage application fraud, mortgage broker fraud, mortgage insurance fraud, mortgage servicing fraud and other related offenses.
Because both a financial institution and the government may be defrauded, defendants can expect aggressive prosecution, which may include multi-count indictments. If the offense is prosecuted under state law, defendants can expect to be charged with a felony if more than $1,000 was obtained through the FHA mortgage fraud scheme. Bank fraud, mail fraud, and wire fraud are all federal offenses defendants are frequently charged with, and each offense carries a potential maximum penalty of three decades imprisonment.
FHA fraud charges should not be taken lightly, because defendants who are involved in fraud schemes in any capacity can find themselves facing the potential for a felony conviction and a lengthy prison sentence. Bukh Law Firm, PLLC has successfully helped individuals, mortgage brokers, banks, and other institutions to fight charges and avoid conviction or reduce the charges and penalties associated with the crimes they have been accused of. Give us a call to speak with a member of our legal team to learn more about the legal assistance that we can offer if you’ve been accused of FHA mortgage fraud.