What are the penalties for mortgage fraud in New York?

In New York, mortgage fraud is a serious white-collar crime that is unethical and has negative effects on the economy. Mortgage fraud can involve various illegal schemes whereby an individual borrower or industry professional misrepresents or misstatements on mortgage documents to secure housing or make an illegal profit. If you have recently been charged with mortgage fraud, you need a skilled Rockland County Criminal Defense Attorney on your side. Keep reading to discover the potential penalties for mortgage fraud in New York. 

What is mortgage fraud?

Essentially, mortgage fraud occurs when someone lies or omits critical information on mortgage documents to secure housing or make a profit. According to the Federal Bureau of Investigation (FBI), mortgage fraud is any sort of “material misstatement, misrepresentation, or commission relating to the property or potential mortgage relied on by an underwriter or lender to fund, purchase, or insure a loan.” As the definition lays out, mortgage fraud can be committed by both individual borrowers and industry professionals. Typically, those that commit mortgage fraud participate in either fraud for housing or fraud for profit. Fraud for housing involves providing lenders with inaccurate information to qualify for a loan or obtain a more favorable agreement when buying a home. Fraud for profit involves industry professionals extracting money from a property or transaction for their gain.

What are the potential penalties in New York?

According to research, one in every 109 mortgage applications shows indications of fraud. That being said, white-collar crimes such as mortgage fraud carry significant penalties to deter and prevent fraudulent applications. When the courts determine a criminal sentence for mortgage fraud one of the main factors they look at is the amount of money that has been stolen or misappropriated by the victim. That being said, usually at the state level, if you take less than $1,000 in a fraud scheme, it will be classified as a misdemeanor offense. If you are charged with a misdemeanor, you will likely face probation, thousands of dollars in fines, and up to one year of jail time. However, if you take more than $1,000 in a fraud scheme, it will be classified as a felony offense. Felony convictions are punishable by more than a decade of imprisonment and fines of over $100,000.

Mortgage fraud can be committed at the state and federal levels as some schemes involve multiple parties crossing state lines. Federal sentences are often more severe than state sentences. In 2009, the Fraud Enforcement and Recovery Act (FERA) was enacted to enforce mortgage fraud laws. As a result of FERA, a conviction of federal mortgage fraud can result in up to 30 years in federal prison and a $1 million fine. Additionally, it is imperative to note that the repercussions of mortgage fraud will also likely involve restitution. Essentially, you will be required to pay a certain amount back to the victims of your crimes.

If you have been charged with mortgage fraud in New York, it is in your immediate interest to retain a qualified Rockland County criminal defense attorney. Our firm is prepared to aggressively fight on your behalf to protect your rights and interests.