Understanding Mortgage Fraud In Nevada
In a general sense, mortgage fraud in Nevada refers to the act of engaging in a deceitful mortgage transaction. The primary motive behind this fraudulent activity is usually financial gain. Mortgages, being complex transactions involving multiple steps, typically involve various participants, such as:
- A homebuyer
- A homeowner
- A loan officer
- A mortgage broker/ lender
- A real estate agent
- An escrow agent
- An appraiser
Fraudulent mortgage transactions can be perpetrated by a single player or a group of individuals colluding together. Regardless of the scale, any dishonest act that significantly impacts a mortgage lending transaction can be classified as criminal fraud.
Federal Loan Fraud Charges
The statute’s primary focus lies in identifying specific public and private entities to which it applies. Irrespective of the agency involved, 18 U.S.C. § 1014 makes it a criminal offense to knowingly provide false information to any of the listed agencies with the intention of influencing their decision-making process.
Consider this scenario: imagine someone applying for a loan from an “agricultural credit association” and deliberately providing false information about their monthly income and asset value. Such deceptive statements could lead to a conviction under 18 U.S.C. § 1014.
The Federal Bureau of Investigation (FBI) will conduct investigations into allegations of bank fraud and mortgage fraud. In numerous instances, financial institution fraud is perpetrated by an employee of the bank or a lender against an actual customer. This type of crime can involve embezzlement and identity theft. Mortgage fraud typically occurs when individuals seek to profit from deceptive practices.
Our federal criminal defense attorney specializes in dealing with a range of common offenses. These include foreclosure rescue schemes, fraudulently obtained home equity conversion mortgages, fraudulent commercial real estate loans, loan modification schemes, equity skimming, unlawful property flipping, and silent second mortgages. If you find yourself facing allegations of mortgage fraud in Nevada, it’s important to understand that you could potentially face criminal charges for a wide variety of federal offenses, including:
- 18 U.S. Code § 1343 – Wire Fraud
- 18 U.S. Code § 1344 – Bank Fraud
- 18 U.S. Code § 1956 – Money Laundering
- 18 U.S. Code § 371 – Conspiracy
- 18 U.S. Code § 1001 – Submitting False Statements
- 18 U.S. Code § 1014 – False Loan or Credit Application to Federal Agency
Types of Mortgage Fraud
Fraud For Profit
Mortgage fraud is commonly perpetrated by insiders who exploit their expertise and authority. The FBI’s Financial Institution Fraud Investigations Bureau reveals that a significant portion of today’s mortgage fraud cases involves collusion among industry insiders, including appraisers, attorneys, bank officers, loan originators, mortgage brokers, and others in the housing industry. These individuals engaged in fraudulent profit schemes have no interest in obtaining housing; rather, they manipulate the lending process to unlawfully obtain equity and cash from homeowners or lenders.
Fraud For Housing
In the pursuit of obtaining or retaining homeownership, borrowers might resort to unlawful activities. For instance, borrowers may provide false information about their assets and income on a mortgage loan application or attempt to influence an appraiser into manipulating the value of their property.
Common Mortgage Fraud Schemes
The Nevada Attorney General issued a statement regarding the most widespread fraudulent mortgage schemes in the state. Here are some of the notable ones:
False Loan Modification Schemes
This fraudulent scheme targets distressed homeowners by offering false promises of home refinancing, principal loan reduction, and foreclosure prevention. Perpetrated by private entities unrelated to mortgage lenders, these companies often demand substantial upfront fees but fail to deliver on their commitments, leaving homeowners in a more precarious situation than before.
False Loan Applications
This happens when potential homebuyers provide false or hide important information on their mortgage applications. The misleading details could involve their income, debts, identification, or intentions to fulfill the mortgage obligations. In some cases, loan officers may also deceive by misrepresenting the homebuyers’ information to ensure they receive a commission for closing the mortgage.
This occurs when home sellers offer bribes or incentives to appraisers in order to inflate the value of the home. If the appraiser accepts the bribe, both the home seller and appraiser may face prosecution for violating NRS 205.372.
It is also a violation of NRS 205.372 to submit a mortgage document to the county recorder containing false information. Additionally, any person who knowingly receives funds from a fraudulent mortgage transaction is held accountable, regardless of whether they were directly involved in the mortgage.
Penalties For Mortgage Fraud Charges
Committing mortgage fraud in Nevada is considered a serious offense, classified as a category C felony. As a result, those found guilty of this crime face significant penalties, including:
- 1 to 10 years in Nevada State Prison
- Fines of up to $10,000
Convictions related to multiple fraudulent mortgage lending schemes may result in a classification as a category B felony, carrying with it the following penalty:
- 3 to 20 years in Nevada State Prison
- Fines of up to $50,000
Regardless of the level of conviction, the fraud victim will receive restitution, and each individual charge of fraud may incur a civil fine of up to $5,000.
Federal Charges For Mortgage Fraud
Mortgage fraud is a serious offense that is punishable both at the federal and state levels. On a federal scale, individuals may face charges such as wire fraud, mail fraud, or bank fraud. If found guilty, these charges carry their own set of penalties.
- Bank Fraud – Up to 30 years in federal prison, a fine of $1,000,000, or some combination of these two penalties.
- Wire Fraud – Up to 20 years in federal prison and fines determined on a case-by-case basis.
- Mail Fraud – Up to 20 years in federal prison and fines determined on a case-by-case basis.