According to the Mortgage Asset Research Institute, Florida has led the nation in cases of mortgage fraud for the past five years, despite efforts by authorities to crack down on the crime. This summer, the U.S. Attorney's Office in Miami unsealed four indictments accusing 27 people of various types of mortgage fraud. The mortgage fraud schemes involved over $30 million in bad loans and prosecutors brought a variety of charges against those involved, including mortgage fraud, insurance fraud, mail fraud and arson.
Two of the indictments involved straw buyer schemes in Miami-Dade and Palm Beach counties. The people involved in those cases lied on mortgage documents to purchase properties at inflated prices and give kickbacks to those running the scam. The two schemes involved $22.9 million in fraudulent loans for more than 22 properties in the two counties.
Arson and Insurance Fraud
The third indictment centered around a plan to burn down a home after the owner fell behind in his mortgage payments. After failing in that plan, the owner of the house enacted an illegal short sale of the property to a friend for $77,000 even though the property had a $300,000 mortgage on it. Then the owner's friend transferred the property to a company the owner controlled. The company then sold the property for $240,000. Investors lost at least $500,000 as a result of the fraud.
The final indictment concerned a real estate agent who took the money that his clients used to refinance their homes and kept it for himself, instead of paying off the clients' old mortgages as he was supposed to do. Failing to pay off the mortgages left these homeowners facing foreclosure because they were no longer making payments on mortgages they did not know still existed.
Penalties for Mortgage Fraud
In 2009 President Obama signed the Fraud Enforcement and Recovery Act (FERA) into law, which increased federal penalties for mortgage fraud. Those convicted of mortgage fraud now face up to 30 years in federal prison and fines of up to $1 million. FERA also extended the statute of limitations for mortgage fraud from five to 10 years.
Twenty-five of the 27 people indicted are in police custody and they face at least 20 years in prison if convicted. Mortgage fraud charges are serious and prosecutors pursue these cases with vigor. If you are facing charges of mortgage fraud do not hesitate to contact an experienced criminal defense attorney who can help you achieve the best outcome in your case.
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