Mortgage Fraud Lawyer Helps Understand the Refinance Charges
When a Refinance Becomes a Criminal Offense?
Refinancing a loan should be a straightforward transaction. An existing property owner takes a new loan to pay off the old loan for a property that he owns. An appraisal occurs to ensure that there is sufficient equity in the home for the new loan to be collateralized, and the loan is then issued.
In reality, refinance fraud is very common and has become more prevalent in light of government programs aimed at making it easier for struggling homeowners to refinance. Refinance fraud can be perpetrated against banks and lending institutions and/or can be designed to defraud property owners. Loan modification fraud can also be perpetrated by debtors and even some lending institutions have also been accused of modification fraud.
Because refinance fraud can lead to federal criminal charges for offenses including bank fraud, mail fraud, and wire fraud, it is imperative that anyone accused of this offense get help from an experienced New York City refinance fraud lawyer.
At Bukh Law Firm, PLLC, our attorneys represent individuals, investors, companies, mortgage brokers, and banks. Give us a call to learn how we can help you respond to criminal charges, state or federal investigations, or civil actions.
Types of Refinance Fraud and Loan Modification Fraud
Refinance fraud and loan modification fraud involve schemes to mislead, use false promises, or use false pretenses to unlawfully obtain something of value. Examples of refinance and mortgage modification fraud vary based on who is allegedly perpetrating the fraud offense. Some of the different types of behaviors that can lead to criminal charges include:
- Companies promising to “help” consumers refinance: Sometimes, companies will charge a homeowner an exorbitant fee to provide assistance with refinance. Homeowners may also be told the fee is necessary for participation in the Making Home Affordable Plan passed by the federal government to offer help to struggling homeowners. The unnecessary fee is paid, but no efforts are made to actually assist the consumer in securing the loan.
- Equity stripping: A homeowner is offered help with the refinance process, often to avoid foreclosure or when underwater. To get this assistance, the homeowner signs over a portion of ownership of the home (or full ownership of the home). A refinance loan is obtained, the money is taken, and the homeowner is left owing more on the home.
- Appraisal scams and/or mortgage broker fraud: The value of a property is inflated or misrepresented by an appraiser and/or mortgage broker to obtain a cash out refinance loan for more than the property is worth. The lender is left with a loan with insufficient collateral and the proceeds of the loan are pocketed by those involved in the scheme.
- Misrepresenting income to refinance a loan: In addition to showing that the home has sufficient value, a borrower generally must provide sufficient proof of income to show the refinance loan will be repaid. A homeowner who lies about income could be held responsible for refinance mortgage fraud. If a broker provides assistance in withholding the truth about income from a mortgage lender, the broker could also be held responsible for fraud.
- Mortgage modification fraud: Lenders or mortgage servicers may also engage in refinance or modification fraud. Lenders may tell homeowners who are underwater or behind on payments that a mortgage modification is available if payments are made. When the homeowner makes the payments, the modification never occurs. A servicer who purchases a mortgage may also refuse to abide by the terms of a prior modification agreement, or a lender may mislead a buyer about whether mortgage modification is possible while moving towards foreclosure without the buyer’s awareness.
The penalties and criminal charges for mortgage fraud can vary significantly depending upon which of these or other schemes you are accused of being involved in. A NYC mortgage fraud lawyer can help you to understand what the possible consequences are if you are convicted of a fraud offense.
Penalties for Refinance Fraud
Refinance fraud often involves sending false, misleading or inaccurate documents via the mail or postal service. This can result in an indictment for the federal crimes of mail fraud and/or wire fraud. These offenses could result in up to 20 years imprisonment. However, if the mail or wire fraud is part of an attempt to commit fraud against a financial institution like a mortgage lender, the possible penalty goes up to 30 years imprisonment and a $1 million fine.
New York law also makes residential mortgage fraud a crime in Article 187 of the Penal Code. There are differing degrees of residential mortgage fraud offenses based on the amount of money at stake in the fraud scheme.
Because you could face multiple federal charges as well as criminal action on the state and federal level, you need to do everything you can to protect your interests when you are being questioned, if you are accused of refinance mortgage fraud, or if you are charged with a fraud offense.
How a New York City Refinance Fraud or Modification Fraud Lawyer Can Help
At Bukh Law Firm, we firmly believe every defendant must be treated as innocent until proven guilty. Federal authorities are still aggressively going after people accused of mortgage fraud in the lingering aftermath of the 2008 financial crisis. You need to defend yourself and understand your legal rights.
Our New York City criminal defense lawyers will work hard to help you get the best outcome possible by going to trial or by negotiating a settlement deal. Contact us today to learn more about how we can help you.