Mortgage fraud occurs when you give false or incomplete material facts to obtain a home loan or gain money from a real estate deal. The false details often affect a lender’s choice to approve, fund or insure the loan. Your actions may cause financial loss and lead to state or federal charges.
Mortgage fraud usually falls into two groups: fraud for profit and fraud for housing. Ohio does not have one criminal law called “mortgage fraud.” Instead, state prosecutors may use laws that cover theft, forgery or securing loan papers through deception, depending on the facts of the case. You might face charges under Ohio or federal law, depending on the facts. A conviction may lead to prison, fines or repayment of financial losses.
Fraud for profit schemes
Fraud for profit occurs when you use false information or sham real estate deals to take money or equity from a lender, seller or buyer. These schemes often involve people who work in real estate or home appraisal.
One common method is property flipping fraud, where you buy a home and quickly resell it at an inflated, made-up value. You might also use a straw buyer to hide who controls the deal or rely on a false appraisal to support the price. Investigators often review loan files and financial records to trace the funds and identify each person’s role.
Fraud for housing schemes
Fraud for housing usually involves false loan information used to buy or keep a home. You may face scrutiny if you misstate your income, assets, debts or work history. You might also raise concerns if you falsely claim that you plan to live in the property.
Your goal in a fraud for housing scheme is usually to obtain housing rather than make money from the deal. Even so, prosecutors must prove that you knowingly made a false statement and had the intent required by the charge. This distinction matters because an honest error does not show the same intent as a statement you knowingly made false. Prosecutors must prove the level of knowledge and intent required by the charge.
Understanding the charges
A mortgage fraud inquiry may involve document requests, interviews and a review of financial transfers. Consider keeping notices and loan records and tracking each contact with an investigator. Understanding the claim and the laws at issue could help you prepare for a white collar crime case and protect your interests.