Mortgage Fraud

If you are one of the many people in Arizona charged with mortgage fraud, call experienced Mortgage Fraud Attorney Ashley D. Adams. According to the FBI, mortgage fraud is one of the fastest growing white collar crimes in the United States. Criminal investigations into mortgage fraud allegations are particularly common is states most impacted by the real estate crisis of the last several years. A criminal action can be initiated whenever a prosecuting agent believes that a mortgage loan has been obtained by way of false information or concealment of material information. Because of the housing crisis, law enforcement officials have increased their mortgage fraud investigations and arrests. Convictions can result in prison sentences as long as 40 years.

If you are being investigated or have been arrested for mortgage fraud, it is essential that you retain an experienced mortgage fraud attorney as soon as possible. Investigations are lengthy and complex and each step of the process should be handled by a knowledgeable white collar criminal defense lawyer. Even if you have not been arrested but fear that you may be the subject of an investigation, contact Attorney Ashley D. Adams for a free, no-obligation and confidential consultation.

What is mortgage fraud?

Mortgage fraud can be defined as misrepresentation with the intent to obtain a more favorable deal on a mortgage. The FBI defines mortgage fraud as “any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.” There are two distinct areas of mortgage fraud that are investigated by the FBI:

  • Fraud for housing: This type of fraud consists of illegal actions by the borrower to acquire a home under false pretenses. Often the borrower makes misrepresentations about income or employment history in order to qualify for a loan (or for a higher loan amount). Fraud for housing is almost always charged as a misdemeanor.

  • Fraud for profit: This is sometimes referred to as “industry insider fraud.” The goal of fraud for profit is to obtain an inappropriately large loan, even though this type of mortgage often goes into default. The FBI has concentrated most of its efforts on this type of fraud because nearly 80 percent of all reported fraud losses involve collaboration or collusion by industry insiders, such as accountants, appraisers, loan officers, agents, developers, or mortgage title companies.

Types of Mortgage Fraud Our Firm Handles

Allegations of mortgage fraud can be varied, depending upon the circumstances. Our law firm handles all types of fraud cases but some of the most common include the following:

  • Equity skimming involves the use of corporate shell companies, corporate identity theft, and the use or threat of bankruptcy and foreclosure to mislead homeowners and investors.

  • Property flipping is the use of identity theft, straw borrowers, shell companies, and industry insiders to purchase properties and artificially inflate their values through false appraisals. The properties are then repurchased several times for higher prices.

  • False statements include obtaining a mortgage through misrepresentation of income, employment, residency or other loan information.

  • Appraisal fraud consists of actions involving overstatement or understatement of a property’s appraised value.

  • Fraud for profit is the use of a credit report from someone (a “straw borrower”) who allegedly purchases property in order to conceal the identity of the real purchaser.

  • Identity theft is the fraudulent use of another’s identity to obtain a mortgage without that person’s knowledge or consent.

  • Occupancy fraud occurs when a borrower fraudulently obtains a lower interest rate by misrepresenting an investment property as a primary or secondary residential purchase.

  • Shotgunning occurs when multiple loans for the same property in excess of the property’s real value are obtained simultaneously.


Equity skimming and any type of mortgage fraud charges must be fought aggressively with an experienced attorney on your side. Phoenix White Collar Criminal Defense Attorney Ashley D. Adams is a former Assistant United States Attorney in Arizona. She now uses her knowledge of federal prosecution for the defense of her clients. For a knowledgeable and aggressive attorney with the experience to defend your rights, call 480-219-1366 for a candid, confidential and complimentary consultation Adams & Associates Criminal Defense Group.


Most mortgage fraud schemes contain a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase or insure a loan. “Equity skimming” is a type of mortgage fraud that consists of the practice of purchasing residential properties whose owners are in default on their mortgages or real estate taxes, and then diverting rental income from these properties for personal gain rather than applying the rental income towards the overdue payments. This practice “skims the equity” out of a property. In most cases, a “buyer” approaches a homeowner that is either in foreclosure or is rapidly approaching foreclosure but still has equity in the property. The buyer offers the homeowner a new mortgage in exchange for the transfer of title on the deed of the property. The buyer then collects rent from the homeowner with the promise to use it to make mortgage payments. The buyer may also promise to deed the property back once the mortgage is paid. However, the buyer never makes the mortgage payments and allows the mortgage company to foreclose. Equity skimming can also involve:

The following summarizes the key elements of equity skimming:

  • the homeowner in danger of foreclosure is approached by a so-called investor with a “rescue plan”

  • the homeowner deeds his or her home to the investor

  • the homeowner signs a rental agreement

  • the investor offers the homeowner an option to purchase the house back (at a price that is always higher than the price the homeowner sold it for)

  • the investor collects rent from the homeowner

  • the investor fails to make mortgage payments as promised

  • the original mortgage holder forecloses on the house

Equity skimming is a serious type of mortgage fraud that can lead to a prison sentence and heavy fines. Equity skimming on mortgages issued by the Federal Housing Administration is a federal crime that can involve FBI investigation and aggressive federal criminal prosecution. If you are under investigation or have been charged, contact Adams & Associates immediately.


In recent years, an increase in home foreclosures has also led to an increase in foreclosure scams. A foreclosure rescue scam can happen in a number of different ways, each of which is designed to cheat the homeowner out of money or property at a time when the homeowner is in desperate financial circumstances. In response, the federal government and the State of Arizona are cracking down hard on these perpetrators. Many innocent people may be falsely accused.

If you have been accused of foreclosure scams or foreclosure fraud you should immediately contact an experienced criminal defense lawyer even if you are confident that your actions were lawful. The legal penalties for these frauds can be significant. It is therefore essential that you contact Attorney Ashley Adams as soon as possible to ensure that your rights are protected.

Call for a case evaluation with Adams & Associates: 480-219-1366.


Foreclosure scams target homeowners who are suffering from overwhelming debt and facing foreclosure. Some scams result in ownership of a person’s home being transferred to the scammer, while others provide for various large fees for services that are never provided. Some common examples include the following:

  • Short term loans: troubled home owners are approached with an offer of a short term loan. Most of these loans have high interest rates and require a balloon payment. In reality, these loans are additional liens against the property that can be foreclosed upon.

  • Unethical realtors: a real estate agent (or “pre-foreclosure specialist”) may offer to reinstate a person’s loan and sell the house in order to salvage any accrued equity and appreciation in the home. However, the home owner must split the earnings with the agent and therefore loses that equity.

  • Unethical investors: an investor may offer a bailout to a homeowner facing foreclosure by purchasing the property and taking the homeowner’s equity without providing any further assistance.

  • Foreclosure consulting agencies: are usually investors looking to make a large profit by taking a homeowner’s equity, posing as a foreclosure assistance company. They often convince the homeowner to sign a purchase agreement that can be assigned to someone else for a profit and result in the homeowner losing his or her house.

  • Debt negotiating: involves companies that offer to negotiate or consolidate debt for the homeowner. However, the homeowner must prepay high fees for these services that offer nothing that other non-profit agencies provide for free.

  • Financial services: individuals posing as financial services companies offering to assist homeowners facing foreclosure with tax advice, debt management, real estate sales, and pre-foreclosure sales. Fees are usually required up-front. Many are not legitimate corporations and do not possess a license as required by the Arizona State Banking Department for debt or credit counseling.

  • Rent to buy scams: homeowners are told that if they sign over title to their house to a person who will pay off the mortgage, they will be able to stay in their house as renters and then buy back the house in a few years. Typically, the contracts are so burdensome that the former homeowner is unable to buy their house back, and the scammer retains full ownership.

  • Stopping foreclosure with bankruptcy: occurs when the scammer asks for an upfront fee and promises to negotiate with the homeowner’s lender for a lower monthly payment or refinance at a lower rate. The scammer may simply file a bankruptcy case in the homeowner’s name after pocketing the fees. Although bankruptcy may temporarily suspend foreclosure activities, it does not stop them.

Individuals involved in foreclosure scams are often charged with violations of the Arizona Consumer Fraud Act. In addition to charges filed by the state Attorney General, the Arizona courts have ruled that the Act provides for a private right of action, which means that private individuals may also file a civil action against a defendant. In order to establish a claim for consumer fraud, it must be shown that:

  • a defendant used deception in connection with the sale or advertisement of merchandise (which includes any object, commodity, real estate, or services);

  • defendant intended that others rely upon the deception; and

  • a plaintiff suffered damages as a result of reliance on defendant’s deception.

Involvement in foreclosure scams can lead to harsh penalties. If you have been accused of foreclosure fraud it is essential that you contact an attorney as soon as possible. At the Law Offices of Adams & Associates, our attorneys have the experience, skill, and knowledge to defend your rights and provide you with the best defense possible. Call attorney Ashley Adams today.


After the collapse of the real estate market, many mortgage fraud cases have involved inflated appraisal of property. Appraisers are often the subject of loan fraud investigations by lenders and federal authorities. Charges against appraisers typically involve conspiracy to commit wire or bank fraud, kickbacks, overcharges, and appraisers fraudulently helping straw buyers purchase property. If you have been approached by state or federal investigators, have been charged with appraisal fraud, or have been subpoenaed to appear at a grand jury investigation, contact the Law Offices of Adams & Associates as soon as possible. Real estate appraisers are considered industry insiders and criminal penalties can be severe. Our experienced appraisal fraud attorneys will aggressively defend the charges against you. We also handle all types of appraiser malpractice and negligence claims. Call Ashley D. Adams today for a free case evaluation regarding inflated appraisal.


Inflated Appraisal or appraisal fraud occurs when there is an intentional and material misrepresentation of the value of property. It can be an overstatement or understatement of a property’s appraised value. It generally involves outright fraud on the part of an appraiser, often in collusion with other parties (such as a loan originator paid on commission, who may pressure an appraiser to inflate the estimated property value of a piece of real estate). 


Charges of appraisal fraud can result from any of the following actions:

  • failure to consider the market values of comparable property

  • failure to consider outside variables in addition to market values

  • failure to account for the condition of the property

  • failure to ensure that all relevant data has been collected for use in the appraisal

  • failure to use standard and accepted practices of research and value assessment

Any of the above actions may allow an appraiser to manipulate or inflate the comparable locations, market values, and property characteristics. These types of falsified appraisals are sometimes charged in connection with other white collar crimes, such as bank fraud and mortgage fraud. Appraisers may also be charged with fraud if they inflated an appraisal as part of a real estate “flipping” scheme used to quickly resell the property to a straw or duped buyer for profit.


An inflated appraisal may also be the result of appraiser negligence. Unlike an intentional act of fraud, appraiser negligence occurs when an appraiser fails to exercise the degree of care and skill that an ordinary appraiser would exercise. For example, an appraiser might fail to adequately research comparables when establishing a property’s value or fail to use methods generally recognized and accepted by other appraisers. A breach of this standard of care in the appraiser’s performance may give rise to charges of professional negligence and malpractice.


Appraisal fraud can led to a jail sentence as well as substantial compensatory and / or punitive monetary damages. An appraiser can also lose his or her license if convicted. However, just because you have been charged or are under investigation does not mean that the allegations are correct. It is very important to challenge appraisal fraud charges as early as possible. At the Law Offices of Adams & Associates, our experienced white collar crimes attorneys can handle any type of appraisal fraud or malpractice claim. If you have been charged or are under investigation for appraisal fraud, call today. We will aggressively protect your rights and provide you with the best defense available.

Adams & Associates Criminal Defense Group

The rapid increase in mortgage fraud has prompted the federal government to aggressively investigate and prosecute alleged mortgage fraud schemes that can involve home buyers, investors, brokers, or other professionals in the mortgage industry. The consequences of a mortgage fraud conviction are severe. If you are being investigated, or have been charged with mortgage fraud, reach out to our office in Arizona today. Mortgage Fraud Attorney Ashley D. Adams has significant experience defending clients accused of complex white collar crimes and she will work diligently to ensure that your rights are protected.


At Ashley D. Adams, PLC, we have a well-established track record of success that can make a difference, whether in defending charges of white collar crime, health care fraud, financial fraud, general fraud charges, other criminal or civil matters, or representing our clients during a government investigation.

Ashley D. Adams, Principal
+1 (602) 524.3801

Adams & Associates, PLC

7502 E. Monterey Way
Scottsdale, AZ 85251
Phone: 480.219.1366
Cell: 602.524.3801
Fax: 480.219.1451



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