You may know that mortgage fraud is considered a federal crime and that the government takes the charges very seriously. What you might not know is how the FBI goes about prosecuting these crimes. This is an issue. Not knowing the intricacies of how a charge is classified and dealt with leaves you lost when you contact them. Here, then, is how the FBI views and treats mortgage fraud.
Mortgage fraud is a subcategory of Financial Institution Fraud, which is where crimes are aimed at stealing from federally-insured financial institutions such as banks and credit unions. Credit card scams, account holder impersonation, and embezzlement count as Financial Institution Fraud (FIF). Identity theft is considered a FIF where the institution and the individual whose identity was stolen are considered victims. FIF is broken down in 2 groups: external fraud committed by outsiders, such as counterfeit checks cashed by random con artists, and internal fraud committed by employees, such as embezzlement.
However, mortgage fraud gets a special place in the FBI’s heart. They expanded the definition when the housing market collapsed to let them go after fraudsters who victimize distressed homeowners. In 2011, they launched a sting for it caused Operation Stolen Dreams, and while the sting ended, their focus remains strong.
Breakdown of Mortgage Fraud
The FBI breaks mortgage fraud into 2 categories. There is fraud for profit. This is where people, mostly industry insiders, use the lending process to steal from lenders or homeowners. Equity skimming, Air loans (where brokers invent borrowers and properties to steal from creditors) and Reverse Mortgage Fraud are examples of this. The FBI focuses on these types of cases as much as possible.
The other type of mortgage fraud is fraud for housing. This is when borrowers commit fraud to get or keep a house. Lying on the application forms about assets and inflated appraisals are some examples.
Who Investigates, What Department
Their criminal branch investigates white collar crime, but they have specially designated groups for FIF and mortgage fraud. The FBI has several Financial Crimes Task Forces composed of state, federal and local agencies. These are stationed at field offices throughout the country, one of which is in Phoenix, Arizona.
As you can see, anyone charged with mortgage fraud is facing a lot of complications. If you need help with a case, contact us. We have plenty of experience dealing with federal cases.