Mortgage fraud involves using false or misleading information to obtain a mortgage loan. Mortgage fraud can take many forms, including identity theft, loan origination fraud, mortgage servicing fraud, and foreclosure rescue scams. Mortgage fraud is a serious crime in Nevada, and it can have serious consequences for those who are convicted. This article discusses the different types of mortgage fraud, the penalties associated with the crime, and the steps people can take to protect themselves from fraudsters.
Legal Definition of Mortgage Fraud
Mortgage fraud often involves providing false information on a mortgage application. This includes providing false income, assets, or employment information. It can also include providing false information about the property itself, such as the value of the property or the amount of equity in the property. Another form of mortgage fraud is flipping, which occurs when someone purchases a property intending to quickly resell it at a much higher price.
Mortgage fraud can also involve taking out a mortgage with no intention of ever making payments. This is known as “straw buying,” and it typically involves the use of stolen identities or false identities. It can also involve the use of false documents such as fake deeds or fraudulent tax returns.
Nevada Mortgage Law
The Nevada Revised Statutes (NRS) make it a crime to make false or misleading statements in mortgage documents. According to the NRS, anyone who “knowingly and willfully makes any false or misleading statement” in any document connected with a real estate transaction is guilty of mortgage fraud. This includes false statements about income, assets, debts, or any other material facts related to the loan. The NRS also makes it a crime to engage in a “scheme or artifice” to defraud a lender. This includes activities such as inflating appraisals, providing false information to a lender, and exaggerating the value of a property.
In addition, the NRS makes it a crime to “intentionally conceal” any material information from a lender. Those convicted of mortgage fraud in Nevada can face a range of punishments including fines and jail time. The severity of the punishment depends on the amount of money involved and the type of fraud committed. A lender or other party may be able to sue those convicted of mortgage fraud for damages related to the fraud. This includes losses such as lost profits, court costs, and attorney’s fees.
The Nevada Department of Business and Industry Division of Mortgage Lending is responsible for investigating and prosecuting mortgage fraud cases. The Division has a Mortgage Fraud Unit that actively pursues mortgage fraud cases. The Unit works with other law enforcement agencies, including the FBI, to investigate and prosecute cases of mortgage fraud.
What Are the Different Types of Mortgage Fraud?
Mortgage fraud is a serious issue in Nevada and across the country. It is estimated that mortgage fraud costs the U.S. economy over $1 billion annually. In Nevada alone, mortgage fraud has cost mortgage lenders over $100 million. With such large losses, it is important to be aware of common mortgage fraud schemes in the state.
The most common type of mortgage fraud in Nevada is occupancy fraud. This type of fraud occurs when a borrower misrepresents the intended use of the property. For example, a borrower might claim that the property will be a primary residence when it is intended to be a rental property. This type of fraud is often perpetrated by investors who are looking to acquire properties with favorable loan terms.
The other type of mortgage fraud is income fraud. This type of fraud occurs when a borrower misrepresents their income or assets to qualify for a loan. It is often perpetrated by borrowers with poor credit histories who are looking to acquire a loan they would not otherwise qualify for.
Another type of mortgage fraud in Nevada is appraisal fraud. This type of fraud occurs when a borrower works with a third-party appraiser to inflate the appraised value of a property to obtain a larger loan. Appraisal fraud can be difficult to detect, as it is often perpetrated by professional appraisers.
The other type of mortgage fraud in Nevada is identity theft. This type of fraud occurs when a borrower uses the identity of another person to qualify for a loan. Identity theft can be particularly damaging to the victim, as it can have a long-term negative impact on their credit score.
Another type of mortgage fraud in Nevada is straw buyer fraud. This type of fraud occurs when a borrower uses the identity of another person to purchase a property. This type of fraud is often perpetrated by investors who are looking to acquire properties with favorable terms or by criminals who are looking to launder money.
Penalties for Mortgage Fraud in Nevada
Mortgage fraud is a serious offense in the state of Nevada, and those found guilty can face serious penalties. In Nevada, mortgage fraud is prosecuted as a felony. Depending on the severity of the crime, a conviction can result in up to 15 years in prison and/or a maximum fine of $50,000. Additionally, those found guilty of mortgage fraud in Nevada may be required to pay restitution or forfeit any proceeds or profits gained from the fraud.
In addition to criminal penalties, mortgage fraud can have serious civil consequences. Civil cases are handled through the court system and can result in a fine of up to three times the amount of fraud. This is in addition to any other penalties imposed by the court.
Those found guilty of mortgage fraud can also face professional consequences. In Nevada, individuals convicted of mortgage fraud may be ineligible for certain licenses, such as a real estate broker's license. They can also be suspended or barred from participating in federally insured mortgage programs.
Federal Penalties
According to the Federal Bureau of Investigation (FBI), mortgage fraud is defined as a “material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.
In the United States, mortgage fraud is prosecuted under the federal criminal code. The maximum penalty for a single count of mortgage fraud is 30 years in prison and/or a fine of up to $1 million. If the fraud involves a federally insured loan, the penalty can double to 60 years in prison and/or a fine of up to $2 million.
Defenses for Mortgage Fraud
Several defenses can be used to fight mortgage fraud charges in Nevada. These defenses depend on the specific circumstances surrounding the case, but the most common ones include:
Lack of Intent
The prosecution must prove beyond a reasonable doubt that the defendant had the intent to defraud the lender to obtain a loan or mortgage. If the defendant can show that they did not have the requisite intent, then the charges may be reduced or dismissed.
Lack of Knowledge
In some cases, the defendant may be unaware that the information they provided was false or inaccurate. If this is the case, their charges may be reduced or dismissed.
Mistake of Fact
If the defendant reasonably believed that the information they provided was correct, they may be able to use the mistake of fact defense. This means that, even if the information was false, the defendant had no way of knowing that it was.
Unreliable Witnesses
In some cases, the prosecution may rely on witnesses who are not credible. If the witnesses are unreliable or have the motive to lie, then the defendant may be able to get the charges dismissed.
Insufficient Evidence
For a defendant to be convicted, the prosecution must present enough evidence to prove beyond a reasonable doubt that the defendant committed mortgage fraud. If the evidence is weak or insufficient, then the defendant may be able to get the charges reduced or dismissed.
Who is the Victim in a Mortgage Fraud Case?
Mortgage fraud is a crime that affects all parties involved in a real estate transaction, including buyers, sellers, lenders, and title companies. The victim of mortgage fraud may be anyone involved in the transaction, but it is typically the lender that suffers the most financial loss.
The lender is often the victim of mortgage fraud because they are the party that advances the funds to the borrower. The lender relies on the accuracy of the information provided by the borrower to determine if the loan is a good risk. If the lender is misled by false information, they may be left with a loan that is unlikely to be repaid. In addition, they could also lose money on a foreclosure if the borrower defaults on the loan. If a fraudulent loan is approved, the buyer may be left with a loan they cannot afford and may find themselves in financial distress.
The seller may also be a victim if they are unaware of the fraud and unknowingly accept a loan that is not likely to be repaid. Title companies and other parties that rely on the accuracy of the loan documents may also suffer financial losses. In short, mortgage fraud affects everyone involved in the transaction. While the lender is the party that suffers the most financial loss, all parties involved should take steps to protect themselves and ensure the accuracy of the loan documents.
Can a Mortgage Fraud Conviction Be Expunged?
In Nevada, the state’s criminal record sealing laws allow those convicted of certain crimes to have their case sealed from public view. To have a mortgage fraud case sealed in Nevada, the individual must first be eligible for record sealing. Those convicted of a felony are eligible for sealing after a certain period has passed. The amount of time varies depending on the severity of the crime, but it is generally five years after the completion of the sentence.
Those convicted of a misdemeanor are eligible for record sealing immediately after their sentence is completed. Once eligibility has been established, the individual must file a petition for criminal record sealing with the court in the county where the conviction occurred. The petition must include information, such as the individual’s name, address, and the details of their conviction. The court will then review the petition and determine whether or not to grant the request. If the court grants the request, the individual’s criminal record will be sealed from public view. This means that the records related to the case, including court documents and arrest records, will no longer be accessible to the public.
Apart from the benefits associated with having your criminal record sealed, there are also restrictions associated with it. For example, certain government agencies, such as law enforcement and licensing boards, may still be able to access the individual’s criminal record.
Can a Mortgage Fraud Conviction Lead to Deportation?
In the United States, mortgage fraud is considered a federal crime and is punishable by up to 30 years in prison and a fine of up to $1 million. Depending on the severity of the crime, the perpetrator could also face deportation. This is because mortgage fraud is considered a crime of “moral turpitude”, meaning that it is considered to be a serious offense that reflects negatively on a person’s moral character. To be deported for committing mortgage fraud, the crime must meet certain criteria. It must involve more than just making false statements on a loan application. It must involve a scheme to defraud a financial institution or another person. Additionally, it must involve more than $10,000 in funds or at least five people. It must also be proven that the perpetrator acted with intent to defraud.
Find a Criminal Defense Attorney Near Me
If you or someone you know is facing criminal or civil charges related to mortgage fraud in Las Vegas, Nevada, The Law Offices of Martin Hart can provide the necessary legal advice and assistance. Our attorneys have extensive experience in fraud-related cases and will fight to protect your rights. Call us today at 702-380-4278.